Not as Bad as You Might Think !
Well where to start! Read hundreds of reviews before my trip and nearly cancelled the hotel at one point! However, it is nowhere near as bad as some people have said. Yes, it was built in the 1930s and the paint is chipped, the decor dated and the plumbing temperamental but overall it is a 2.5 star hotel, has 1700 rooms, 12 lifts and the lobby is like piccadilly circus at the best of times, yet we never queued for more than 10 mins to check in and it was 3.45pm - it's busy yet clean and well maintained from what I could see. The staff we encountered were friendly and helpful (especially the guy in the luggage storage room) and the cleaners were friendly and did a good job. I guess if you are friendly then this is reflected right back at you. It's in a busy part of town, very central and right on top of Macys. Easy access to the subway, walking distance to Times Square and we felt very safe. I travelled with my 11 year old daughter and we went all over Manhattan on the subway, saw 2 evening shows and got back safely to the hotel by 11pm each time on foot. Everywhere in the central parts are busy really late so there's always loads of people about, shops are open etc. Our bedding was clean, the bath was slightly chipped but clean, the towels were clean and replaced each day, bins were emptied and the room was hoovered and the bed neatly made every day. We stayed in a Penn 500 room (recommended as it includes breakfast). Good value but do get to breakfast by 8am or all the plain croissants and bagels will be gone. There are other sticky pastries but my daughter only liked the plain ones so we got up early. Coffee and tea are available 24 hours each day. Every floor has ice machines and a vending machine selling coke etc. 
One tip I would give is that you e-mail your travel agent (in my case Expedia) and express your concerns about the hotel. They will then contact the hotel and ask (as I did) for a clean room on a higher floor - from reviews I'd read it seems that the higher floors have been refurbished. I also e-mailed the hotel manager direct several times asking questions about the room, breakfast and my concerns etc. This I am sure alerted them to the fact that I was not going to let them get away with giving me a shabby room. Whether this contributed to us getting a decent room I don't know but I definitely would stay here again. Our trip, one adult and one 11 year old with Expedia for 6 nights was just over £1200 - this price included transfers by shared shuttle bus, empire state building tickets and planet hollywood restaurant tickets for the 2 of us (I booked these at home as part of the holiday) - a real bargain you will agree ! So, take a chance on this hotel, don't listen to those people who want a 5 star all singing, all dancing hotel for the price of a budget one. Our room also had a fridge so if you really wanted to you could buy a few bits and pieces and store them and eat in your room and keep costs down. Don't go to Lindys, it's overpriced and they add the tip to the bill before they give it to you so even if service and food is rubbish (which it was when we went last year), you still have to pay for the privilege (tip from my trip in 2011!). Also, tip your maid. Surprisingly good value is The Plaza for lunch - we had a very fancy time there for just $67 - a bargain considering where you are. Lunch is better than afternoon tea which is a bit too fancy. Lovely place. Overall despite my concerns before going we had an amazing time in NYC and plan to travel again next year. The only downside to our holiday was we had afternoon tea at Alices Tea Cup Chapter 2 on 64th street and I got food poisoning - luckily the food went through me like a dose of salts but avoid - the food seemed ok as well so I guess it must have been a cleanliness issue. Similarly, we had breakfast at Planet Hollywood one morning as a treat and although we weren't ill we felt a bit yucky afterwards - a bit too greasy for us and pricey too. 
Do take the time to visit Century 21 - it's huge (Fulton Street, Cortlandt Street and Rector Street are close by subways) - brilliant value on designer goods - Levis for $27, I got a Calvin Klein dress for $59 and Boss shirt for $59! Worth the trip downtown. Loehmans on 72nd and Broadway is also worth a visit - cut price designer goods. The 9/11 memorial is excellent - it will be a truly beautiful place to visit when its finished - very moving indeed and a great tribute and place to remember those who died. The Freedom tower is going up and there is another one around half way I'd say. I think it's all due to be finished by 2014. ESB is always worth a visit as the views are spectacular. Maybe I'm biased as I adore NYC but with good research and wise spending you can save a fortune and have the adventure of a lifetime !