Cem Sultan in Sultanahmet is pretty stripped down but clean and in the heart of all of the big tourist sites that you will probably want to see. I mean, TWO BLOCKS from Camii Sultanahmet, THREE BLOCKS to Aya Sofya and the Turkish and Islamic Arts Museum and the tram stop and the cisterns, etc, etc. It ran us maybe $40 or $45 per night, but we were working through a travel agency which had an arrangement with the hotel. I can recommened them, too, if you like. Dunno what kind of budget you're on. I noticed there were much better hostel deals in Sultanahmet, especially if you're willing to give up certain creature comforts ... like walls ... or a roof. Yep, some hostels had guests sleeping on the rooftop patios in their sleeping bags. Dunno what kind of bathroom-and-shower arrangements were made for these hardy and communal souls, but the price had to be pretty good!

Hey, just out of curiosity ... Have you priced airfare to Istanbul yet? I heard a rumor that airfare from the States to Europe and the Near East was going to be astronomical this summer ... much worse than last summer ... Last summer (July and August), the best I could do, even through two different travel agents and ten weeks in advance , was $1340 from Dulles in Northern Virginia with Alitalia.

Hali Hotel has a wonderful view of Sultanahmet. www.halihotel.com/
I keep thinking I'll try somewhere different, but I always go back to Hali...something about sitting on the roof terrace, drinking a nice cold Efes beer and feeling the life go on around me. aahhhh can't wait to return in March!
I've heard good reports of Side Hotel as well, so wherever you stay, I hope you have a most wondrous time in that incredible city.