Our room was clean, comfortable and with a new furniture. The owners are very helpful and polite and speak good English! They offer breakfast for €1 which is more than worth it - I dont think you can get a croissant, capuchino and juice anywhere else for that price and to be served in your bed! They will also be kind to order a taxi for you to the airport. The location is a bit distant (15-20 minutes walk) from the main square - Piazza Maggiore, but I wouldnt say it is a big trouble at all.
Well equiped, comfortable and spacious private appartment to rent. The landlord Salvo is a friendly man who can provide good advices about Palermo (for instance, where to eat - he sent us to a great tratoria where we were more than happy to have a dinner!). The location is both in the centre and close to the port, so in the vicinity you have a beautiful park at the sea and also many palaces and churches. The neighborhood is poor and looks a bit dangerous, but the building is very well secured.
The hostel is very much ok. I have stayed in a "family room" with 4 beds, which was comfortable and almost clean. The location is a bit far from the centre, but is well connected with the public transport buses. I didnt like they dont offer alcohol and even beer in the lobby. During the day at the reception there was a very polite and helpful lady, but the night shift was a guy, who looked not too interested in meeting guests' enquirees and demands and even a bit arrogant.