It is located centrally just about 200 meters west of where the busses from Bangkok drop you off. It's easy to miss, but as you walk away from the bus drop off point (not a station or terminal, just a road really) you cross one major road intersection and it's on the right. If you get to another major road section with a roundabout you've gone too far.
The food served there is ok but nothing special and cheaper fare can be found in the excellent night market in Aytthaya. It is a family run place and is very relaxed. Broken English is spoken, but enough to get what you want. Bikes can be rented for 60 baht a day or 40 baht if you bargain. Biking is recommended for sightseeing (but check the brakes first). Water is sold at either 5 baht, or whatever price they say it is. Coke is the cheapest in town at 20 baht for a bottle.
The common area is also where cars get parked at night, so don't be alarmed and expect it to be a little dusty. Everything is dusty in Ayutthaya anyway. The toilets are not the cleanest, but they are serviceable and certainly no worse that you will find in Thailand generally. The shower is just cold water, but decent pressure.
Right now the road outside is under re-construction. It gets a bit noisy in the day but at night everything calms down. There's a great coffee shop up the road which is a lot better than the Nescafe that is served in the hostel. Laundry is offered but you're better off doing it yourself (they will provide buckets) or finding somewhere else that charges per weight rather than per item.
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