My hotel was in a neighbourhood called "Salamanca", just north of the centr - I stayed at the NH Principe de Vergara. It was just renovated and re-opened Sept 2010 - it was great! Fresh, clean, modern, a great rate, and good service. I had studied abroad in Madrid for a whole summer and never explored this area of Madrid, I will definitely be returning! Very clean, green, friendly and well connect with the tube (Avenida de Las Americas). I don't think i saw a tourist the entire time ... I really felt at home!