I got to Santiago on Oct 16 2009 and after a bit of looking around ended up at the Hotel Alameda, its about a block from the Cathedral, great location , clean , family run and cheap. You can check it out at http://www.alameda32.com or the email is email@example.com.
They cater to pilgrims and I had a nice room with bath down the hall for 20E. When I came back a week later they "upgraded" me to a room with a private bath and four beds ( one for each night I stayed) for an extra 5E a night.
Good value and close to everything. The owner also speaks passable English.