For those of you coming to London who might be searching for a cheap and livable place to crash, there is a hostel in Piccadilly Circus called Piccadilly Backpackers. That's where I am staying (in a coed dorm -- even though they advertize female-only dorms, they don't follow that in my experience). I think this is a great hostel: affordable, quiet, no/little theft, safe and impressively clean.
A typical dorm room in the Piccadilly Backpackers hostel (this was my room, which was an eight-bed dorm).
For a nominal daily fee, the hostel provides you with a bunk bed in a mixed-sex dorm, clean sheets, a pillow and blanket, a locker (bring your own padlock), and a hot shower -- free (be forewarned; they do tend to run out of hot water by 8am, though). They have an electronic card key system in place to prevent unwelcome guests from accessing either the building or your room and for only £2, you can rent two large and fluffy towels. They also have a cafeteria with a kitchen and vending machines where you can eat and that you can use for a party during the wee hours after the pubs have closed, a common room where you can watch TV, and of course, the all-important computer room (below);
Most important (in my opinion) is the computer room and internet access, which is not free.
Unfortunately, wifi is not cheap in London (it can run as much as £5-£10 per hour in some places) and worse, I was unable to purchase weekly wifi access using my credit card. You can purchase hourly and daily access at this hostel, but that's so expensive that you are doing better to find a McDonald's or a pub where they give free wifi with a minimal food or drink purchase. The staff at Piccadilly Backpackers have been unable to fix their wifi problem and appear not to be motivated to do so, either.
Piccadilly Backpackers provides a variety of payphones.
So this hostel is not perfect, but I enjoyed my stay very much, and I met a lot of fascinating people. Since I came to London to explore, experience and photograph the city from the buttcrack of dawn until the police chased me out of the pubs at night, a hostel was perfect for what I was seeking, and Piccadilly Backpackers was a great experience! I will return, hopefully.
(NOTE: I was not paid or compensated in any way for writing this review).
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If this is the place that is above the Piccadilly Theater and was called The Piccadilly Hotel, it's the same one I stayed in for about a month a few years ago. I was travelling with another man who was in his 60's. I went as his caregiver. He is in a wheelchair and weighs about 450 lbs. (Ugh!) I am in my 50's, so we were not the normal patrons but we were treated very well by the staff and the other patrons. We were given a room with two sets of bunkbeads for ourselves, so we didn't have to share a room with others. They even held our room for a week while we went to Paris and Rome for a week.
It certainly wasn't the best place I've ever stayed at, but, for the price it was great. The only time I was at the hotel was at night when I was sleeping.
Even my horrible companion couldn't make the whole experience less than wonderful.