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When I was in Rome I found a real cheap hotel posted on a bulletin board in the main train station. They had a list of 5-4-3-2 and 1 star hotels and then at the bottom a list of real cheap places (that's where we stayed). The hotel we stayed at was close to the subway and lots of interesting sites. I remember wondering how we could be staying in a hotel cheaper than the hostel. I can't remember the actual price paid for the room, but it was the cheapest place I stayed at my entire 6-month trip around Europe, hostels included.
Enjoy your trip.
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nice line eh?
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