City BackPackers Hostel Stockholm is fantastic! Although it is one of the pricier options in the city of Stockholm (and what isn't?), anyone would highly recommend spending the extra money to have a great, clean stay. You won't regret it.
The location is in walking distance from the train station -- about fifteen minutes -- and it's situated on a corner of a main drag, so you can't miss it. There's lots of eateries nearby. One in particular, which is another fifteen-minute walk away, is called Pythinian, where they serve a great and affordable Swedish meatball dish (during the lunch hour). Just ask the front desk and they should be able to point you the way. To the main sights, it can be quite a walk dependent on where you're going; however, with that said, you can still stay away from taking the subway and the trams. Just be prepared with good walking shoes.
Rooms and Bathrooms
The rooms are spacious, clean, and safe. Doors use key codes instead of old keys or key cards, which is pretty snazzy. There is enough room to sprawl out and there are cube-sized lockers to fit important things (but not whole bags). The bathrooms are situated outside the room all around the hostel, where both bathrooms and showers were separated. There is plenty to go around and we found them to be hostel clean.
This hostel is great for lounging around and meeting people -- maybe too much, because they have so many cool spaces. The hostel is set up somewhat like a commune with different parts of the hostel on different sides of the building. In the center is a courtyard with tables and chairs, but inside your assigned door you will find many more spaces to relax on all floors. There's even a sauna in the basement that you can use for free (check for hours -- women and men use it at different times). Up near the reception area, there are also free computers to use with access to a printer and a hostel cafe right next door.
Overall, this hostel is a great choice for Stockholm, with a really cool vibe, people, and staff. There's always events on the chalkboard of things the hostel has organized and you can tell they want to make your experience a memorable one. If you have a chance, just stay here!