I stayed here for most of the month of July while volunteering in Cusco. The hostel is cheap and clean, but I'd rather pay more to avoid interpersonal problems with the manager, Milagros, who seemed to eventually come into conflict with every one of us who stayed there during our volunteering. Avoid paying for your room until you are ready to check out, as she might attempt to overcharge you, as she did with several of us.

I stayed at the Posada Init Wasi (House of Sun in Quechua... I recommend learning some of that language if you travel to Cusco!) in Dec 2010 and Jan 2011. I was there for a week and can honestly say my trip was so much better because of the people at the Inti Wasi!
Boris and Milagros are the two the own and run the hostal, and they are more than willing to do anything they can to help. Eliana, Milagros' sister, speaks more English and helped me plan all of my activities, and purchases tickets and everything for me, in order to get "local rates". They were all so patient with my complete lack of Spanish, and every morning when they served breakfast they would help me learn and practice my Spanish. They also would give advice for the best things to see and do. They made the visit very special, comfortable, safe and easy going. At all hours even, since I had to leave early for the Machu Picchu hike, and returned late at night from several tours.

The only reason rooms and sleep quality are not 5 stars is because I love soft beds, and they weren't as soft as I am used to. And sleep quality depends on the other guests, as some were a bit noisy. But all in all I was comfortable, they made sure there was always tea available, hot water for a shower, and anything else I needed.

I highly recommend the Init Wasi. It is not right at the Plaza des Armas, but I liked that as there are no crowds around the Init Wasi. It is only a short walk to the Plaza, or the bus station, or local market, and taxis are easy to catch on the Ave el Sol, 1 block away.

Highly recommended.