Hostel Posillipo -- another place with good directions. Located right next to a tourist information center, bakery, grocery store, tram stop, and the Turkish Quarter, this hostel does not follow the usual hostel road. Likely because tourists haven't really "found" Sarajevo, it feels more like you are staying in a hotel rather than the more typical party atmosphere of a hostel. While some find this a welcome change, if you like the fast-paced atmospheres of bigger hostels, you may well be dissapointed.
This hostel is clean and secure, with open airy rooms that at the largest have three beds in them. The beds are warm and comfortable, with cozy duvets, and good pillows. The bathroom is right across the hall, and is also nice and clean, with the only drawback being the lack of walls or a shower curtain to prevent water from flooding the room. There is, however, a mop to clean up with afterwards.
The only real problem with the hostel is the fact that is right next to a main tram line that is very loud. While service is reduced during the night, it starts very early in the morning, and runs quite late. So if you are a light sleeper you might have a problem.
While there is no kitchen, the cost of food and eating out is so low in Sarajevo that it really doesn't matter much. The owner is very nice, and seems to take a genuine interest in his guests and their well-being.