This wasn't the best hostel I've stayed at so far (in terms of comfort and value), but it is the one that I've most enjoyed staying at. This place has a rough, outdoor feel to it: people can choose to sleep in hammocks in the back yard; taking a shower involves getting cosy with several hundred sleeping mosquitoes; and the leafy abundance gives the place a resort / hippie-retreat feel. This hostel itself is, in my opinion, one of the top attractions of Mérida.
Rooms: outdoorish, basic but nice.
People: friendly mix of young, naïve fun-seekers, and older, more experienced veteran backpackers.
Staff: very accommodating, but limited in their English.
Location: reasonably central — 10min walk from town centre.
Food: basic free breakfast.
Internet: 10 pesos / hr (4 PCs).