Our recommendation for where to stay in Berlin include:
Circus Hotel, Rosenthaler Strasse 1: I opted for this Mitte hotel (not the hostel which is across the street) rather than one of the stuffy older hotels. I had one of my best hotel experiences ever, thanks to a NY Times recommendation. It was very reasonable, and hip and edgy. My room was comfortable and sleek with a great bathroom, 2 twin beds as a king, desk and funky art. I loved the attached restaurant, Fabisch. They had a wonderful breakfast buffet and I ended up eating there a few nights for dinner since the food was wonderful and it was the perfect place to unwind after a long day in the museums. They offered laptops to use, a monthly transit pass to use for a small fee, walking tours (I took an art walk with a local performance artist), a concierge and other great services. The staff was really friendly and helpful. I highly recommend it and would stay there again in a minute. It was in the middle of Mitte and just at the entrance of a U-Bahn stop, across the street from a Tram stop and a short walk to the S-Bahn. The entire area is surrounded by great restaurants, shops and galleries.
Other properties getting good press inlcude the Das Stue and the Soho House Berlin where a membership is required.