I did not have a terrible experience here. I loved the character of the place, beautiful tiles. It was not busy when we stayed in June 2012. I shared a room on the 3rd floor with my friends (4 people 2 double beds for $50) private bathroom, no exterior windows, but high ceiling with a fan, and an interior window towards stairs. Sure the bathroom could have been bigger: there was no counter space, only a small pedestal sink, ceiling was low, no ventilation except into the bedroom (sometimes uncomfortable sharing with 3 other people), no place to hang towel or clean clothing for after your shower except on closed toilet lid, shower head clogged and sprayed water in different directions (make sure to close that shower curtain well or it will get your towel and clean clothes all wet!) water pressure would have been better if this was fixed.
But I suppose we were all not expecting much (having stayed in much, much worse on that trip), so we were satisfied. The beds were too soft for my liking but the linens appeared clean enough. My other friends stayed on the second floor one bed, smaller room but appeared cleaner.
Breakfast consisted of 2 thin pancakes, orange juice, and coffee. Not satisfying, but enough to fill you until you have a real meal. There's plenty of great food in Puebla!
Overall the place could use a deep cleaning, and bigger bathrooms, but considering the age of the building, it is adequate since you should be outdoors walking around Puebla anyway! Loved the location, around a block or 2 away from Zocalo! Don't miss the churro place on the east side of the zocalo, the best I've had in my life! I would go back to Puebla just for their churros!