Hotel Mitru
Av regimento chicas 187, 02-694-3001, is probably the best spot in town. rooms vary from budget bs.40 to luxury us$25. there is a nice swimming pool. the staff is friendly and many of the rooms need renovation. but the included breakfast is fantastic - a large buffet spread of many things. there is wifi in the rooms, but it can be slow at times. there is also one computer available - shared amongst 60 guests, so it's invariably always in use.
La Torre Hotel
This is very nice hotel, staff is very friendly. They also offer 4 day tours but these should not be used as they simply take a commision and hand you off to any driver they can find
Tupiza Hostal
Close to both the bus station and train terminal, as well as the main square. Has a lovely courtyard with a fig tree, and a kitchen - though not very well equipped, this seemed to be one of the few hostels with a usable kitchen in town. Friendly staff father and little son, and interesting gringo visitors. The door is watched 24/7 although at night the doorman is asleep, so ring persistently and/or call ahead if arriving on the 4am train. Rooms are clean, and blankets are provided.
Valle Hermoso
Avenida pedro arraya nâº478 (http://www.valle-hermoso....), run two hi hostels and a travel agency. cheap, clean and well maintained doubles and dorms.