I absolutely love the Hotel Vetusta. I am a real sucker for those old buildings that have been rehabbed, and this one is really nice.
http://www.hotelvetusta.com/ I've stayed there a number of times, and the staff is just wonderful. The staff behind the desk (typically women) also do a lot of cooking of cakes, etc, for the little cafeteria that's connected to the hotel. It's a very nice place, great location.
I'll also throw out the name of a very good hostal, Los Arcos , for a less expensive option. I've stayed here twice now, and the owners are young guys who are working very hard to stay alive in this economy. If you stay there, tell them the peregrina americana with the white hair recommended it. Much more simple than the Vetusta, but much cheaper as well. It also has a great location, right at the arched entrance to the square with the Ayuntamiento (town hall), and a few feet from the library and its many free computers.
http://www.hostal-arcos.com/
Either place is a great way to start the Primitivo, IMO! Buen camino to all those lucky pilgrims starting out soon. Laurie