Not even the superb location (Gran via across from Plaza del Callao) can help this hostal for a better rating. The traffic noise coming from the avenue five stories below is unbearable. Staff is helpfull, rooms are clean.
Important Tip: ask for a room far from the Gran Via Avenue wing.

I spent one night at the Hostal Continental when my travel plans changed and I had to arrive in Madrid a day earlier than expected. Located on Gran Via, across from Plaza de Callao, the Continental is right in the middle of the city. The room is very basic, and looked much like old college dorm rooms: slightly worn linoleum floor, two single beds, a chair, table, and closet. Still, 39 euros per night was a good price for the location. Guests must request the air conditioniing remote control to use the in-room unit, which adds 5 euros to the cost of the room. Traffic noise was a bit of a problem over night, as the windows have not been soundproofed. The room was fairly clean, but the shower curtain hadn't been changed in a while and had some mildew spots on it. They accept credit cards, but the receptionist asked that I pay in cash when checking out. It wasn't worth insisting on charging such a low price. The place was all right for one night.