I stayed at Xamanek Hostel on arrival in Guatemala City and spent my last three nights there. I liked the website I saw and when I got there, it was as nice as I expected. The Hostel is quite friendly, multi-lingual, inexpensive, and it has free airport shuttle if there are three people in your group or you are staying three days.
Best of all it is in the Zona Viva, where I was reasonably able to go out at night. There is a kitchen for guest use and a good supermarket 3 1/2 blocks away. Although it in an area of expensive restaurants, there is an inexpensive one on the next block over, and if one is really desperate, McDonald's is a block away.
Following some excellent directions, I was able to walk to the Ixchel and Popul Vuh museums and to take a bus to the Mercado Central on another day. There is DSL Internet access included and you can make online phone calls anywhere for $.30 US a minute.
People must make a reservation, but you can do this via e-mail. There are five dorm rooms, but they add newcomers to empty rooms first, so unless it is crowded, you and your party will have a room to yourselves.
This place is great. I highly recommend it.
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