I've stayed at the BAXPAX DOWNTOWN Hostel in Berlin Mitte. Great place to stay, location is great, prices okay and they have a bar downstairs. The breakfast was alittle pricy, but there are places to eat everywhere around.
try the free tour they offer - it was awsome!
Check their website: http://baxpax.de/downtown/en/home/ about 7 years ago
Depends on your budget and your preferences but what about one of these:
http://www.hotelderome.com/ is gorgeous
Circus Hostel is excellent - both price and location about 7 years ago