I've stayed in an apartment recently in Madrid right inside Plaza Mayor. It was only 100 euro per night for the 2 of us (+50€ cleaning fee).. I never like to get my hopes to high but it was an amazing apartment when we actually got there. It's rented through
www.madrid-ac.com Their Plaza Mayor apartment. I couldn't figure out why they were so cheap but they apparently are just starting out in Madrid. It was large, clean, tidy and the Plaza atmosphere was gold. Open the bedroom door and your in Plaza Mayor!