I was happy with the Puppet Theatre Hostel. It was clean, our room was nice and was cleaned daily (fresh towels and everything). We shared bathrooms, but they were never busy and always had hot water.
Breakfast was included and was a good spread of bread, cheese, sliced meat, yogurt, and cereal.
There was a good mix of travelers staying there - families, solo travelers, people of all ages. It wasn't simply for backpackers.
There are certainly places with better locations, but this location was great - a short walk to the sights.
The staff were helpful and friendly.
I would recommend it.

Why has no-one else reviewed this place?! I stayed here some time ago but just have to put in a review for anyone who might want to stay here.
It's really well located, only a 5 minute walk from the Moscow train station and just off Nevsky Prospekt, the city's main street. There's a net cafe and a little store nearby, which is convenient.
This hostel may have no frills, but I stayed here with a small group of friends and it really felt like we had the place to ourselves. The rooms were basic, but clean, as were the communal bathrooms. The staff are friendly and helpful.
One word of warning though - don't be late for breakfast as you may not get any at all!
Overall good value - foreign students in Russia, use your Russian student card to avail of a lower price ;)