Residencial María José (Magallanes 646, tel. 061/412218, juan_lasa [at] hotmail [dot] com, US$6 pp) is the Israeli favorite. Residencial Josmar (Esmeralda 517, tel. 061/414417, US$8.50 pp) has also built a spacious campground (US$4 pp) with clearly delineated sites, reasonable privacy, electricity, and hot showers. Magallania Backpacker (Tomás Rogers 255, tel. 061/414950, magallania [at] yahoo [dot] com, US$9 pp for dorms, US$23 d) is an informal hostel-style facility with spacious dorms and a few doubles, including breakfast, kitchen privileges, a TV room, and buena onda (good vibes).
Hospedaje Teresa Ruiz (Esmeralda 463, tel. 061/410472, freepatagonia [at] hotmail [dot] com, US$9 pp) gets high marks for congeniality, cleanliness, and outstanding breakfasts with homemade rhubarb preserves.
The local HI affiliate is Albergue Path@gone (Eberhard 595, tel. 061/413291, pathgone [at] entelchile [dot] net, US$9 pp). Relocated in improved quarters, Hostal Nancy (Ramírez 540, tel. 061/410022, www.nataleslodge.cl [1], US$9 pp with breakfast) has long been a popular choice in its range.
Friendly Residencial Patagonia Aventura (Tomás Rogers 179, tel. 061/411028, US$11 pp) provides a bit more privacy than its competitors. Residencial Sutherland (Barros Arana 155, tel. 061/410359, US$7.50 pp–US$22 d) has recently added rooms with private baths.
Run by expatriate Oregonians, the informal hostel Erratic Rock (Baquedano 719, tel. 061/410355, www.erraticrock.com [2], US$11 pp) occupies a creaky house with genuine character. It also serves a better-than-average breakfast, has a large book exchange, and rents quality equipment for Paine-bound travelers.
Links:
[1] http://www.nataleslodge.cl
[2] http://www.erraticrock.com