I've visited this youth hostel next to the Beixinqiao subway station last year, when some friends came to Beijing, and, well, it's was kind of old and crappy. It basically was the most realistic hutong experience you could get!

But I'm fairly certain you can find some good quality, clean ones. 

Have had good experience, near wanfujing, and tianamen, sorry cannot remember names.  Just suggestion, you may not want to go to hostel in BJ  in winter as the communal shower will be cold, go in spring.  Other than that hostels are lively, and reasonable price

It's a bit of a lottery. My parents stayed in one just next to Great Wall. It was a dump : Chinese countryside toilets, bare concrete floor with cigarette buds, dirty bed sheets, the courtyard was a cobbler's paradise, barely working shower, etc. And it was not cheap.

Not saying it is *always* like that, but I would recommend to see the real thing before going for it.

Me and a friend stayed in Beijing Downtown Backpackers in Nanluoguxiang. It was great. Very clean, friendly staff, great location. It is a hostel for foreigners though, as opposed to something that still looks like a siheyuan. There's plenty of stuff online about it so check it out.

I stayed at Peking hostel and lucky hostel,Peking hostel is good,near Zhangzizhong subway station