212 Riley Street, Surry Hills, Sydney, Australia
The building may be older, but inside the Cambridge Hotel has been fixed up to be quite charming. I stayed in a premium room and it was quite spacious by Sydney standards. It also had new amenities like a flat screen TV and ipod dock. I had to pay an extra $15 for internet access. It's a bit extra to get a room with a balcony, but I think it's worth it and I could see the Opera House.
The location is a bit outside of the CBD, but still easy to get around by bus or taxi. Oxford Street is a short walk away where you'll find lots of great cafes and restaurants.
As long as you don't mind being a bit outside the centre, the Cambridge is a good place to stay and a very competitive price.