Madrid and Barcelona - which neighbourhoods?

Barcelonaarea near Eixample was perfect for walking to many sights-don't miss the Boqueria market.
Madridwe liked staying at Hotel Santo Domingo which overlooked the Palacio and walking distance to most everything including the Prado. Have a great trip!

I'd agree with Susan for Barcelona. The Eixample district, specifically the "Right" side (called "Eixample Dret" in Catalán), is my favorite part of Barcelona in which to stay. It's an elegant neighborhood with some really beautifully buildings, and located just above the Gothic Quarter so everything's accessible but you're staying in a residential-like neighborhood. In Madrid, there are few neighborhoods in which I would not recommend. But narrowing it down, I'd say the area in Huertas (Calle Cervantes, Calle Huertas, & more) is lively with bars, restaurants, and clubs in a very old part of the city, buildings are rarely more than 4 or 5 stories tall, narrow streets, and all of Old Madrid is accessible on foot. When you wake up on a Saturday or Sunday morning you feel like you're in small town, very quiet - although the nights can be noisy. The area around the Opera House is pretty nice too, including the Hotel Santo Domingo mentioned by Susan above. The area east of the Puerta del Sol is central and close to everything too. Some friends of mine recently stayed at the Hotel Regina. Enjoy both Barcelona & Madrid! I know you will. Saludos, MadridMan/BarcelonaMan @ you-know-where!

i like the del sol in madrid. the metro stop is in front of hotel europa which is high commended. the area is busy day and night with plenty to do/eat around. it's walking distance to the palace, plaza mayor, and prado.

In Madrid, consider the area on Gran Via, specifically Gran Via at Funercaral. Hostal Phillipe V and Hostal Montecarlo, both in the same building at 15 (17?) Gran Via...there are hotels around there as well. Convenient to walk to the Puerta del Sol, or to the Funercaral area as well...both are safe in whcih to walk and have many restaurants. And you can also walk down to the Prado area or to the Plaza Mayor and Royal Palace if you feel like it. Subway stations in the area as well.

In Madrid, I would suggest the Plaza Santa Ana area. Lively area, the Cafe Central jazz club is there. Easy walk to Plaza Mayor, Calle de Huertas pedestrian boulevard (which after dark has night life). You can use Calle de Huertas to walk to the Prado (cross one street so not pedestrian all the way). You can also walk to Puerta del Sol and a little farther, the Palacio Royal. Also the Antonin Martin metro station is right there.
In Barcelona, I have stayed at a RS hotel at the top of the Ramblas, hotel Lloret, twice and it's a great location.

In Barcelona, we stayed further up P.D. Gracia in the Gracia neighborhood at Aparthotel Silver. We were about a block from the Fontana Metro Station, so we could hop Line 3 and get out at any of four stops from the bottom of the Ramblas to places in between. The neighborhood right near there is filled with small restaurants and shops plus there are several markets. It was also pretty much quiet, no traffic noise to speak of, just the odd partier on the way home on Friday or Saturday night (morning really)

Lots of good suggestions already listed. In BCN - we stayed at a hotel on Placa Catalunya at the top of Las Ramblas. That was a very good location as terms of a base for site-seeing. We were able to walk to most of the things we wanted to see and if we needed public transport, it was easily attainable in Catalunya.
In Madrid - loved the Hotel Europa. Great room, friendly staff and unbeatable location right on Puerto del Sol. Our room was high up and overlooked Puerto del Sol. Great location and we walked everywhere day and night. Plus train/metro to airport is right there. Tons of shops, walk to Prado, Thyssen, Royal Palace, Plaza Mayor, etc. Restaurants everywhere. Walk to Cava Baja street for Sunday afternoon tapas stroll. Would stay there again in a heartbeat.

Thank you for your responses so far everyone. I'll have to get out the maps and take a look at what you've suggested a little more carefully. I'm sure I'll be back if/when I have more specific questions :)