Any suggestions for smaller, friendly lodgings?
Checkout www.evidenciahoteis.com, to see if it meets your description; it's not small at 58 rooms but is friendly, or was in 2005.
We were in Lisbon in 2004 and stayed at the Jorge V Hotel on the very quiet Rua Mouzinho da Silveira near the north end of the Baixa (pretty central). The very friendly porter just about tripped over himself helping us with our luggage. The rooms were small but clean and had a neat little balcony. The breakfast room was good. Their website is www.hoteljorgev.com
We stayed at Albergaria Residencial Insulana nr Praca Rossio in Oct 2006. We loved it for everything and we heard a seranade one night outside our room. Perfect and 55 euros. it is in Ricks book and it is NOT smokey.
Residencia Roma,where we stayed in 2005. Moderate cost, spacious and clean. We had an apartment there. Near Avenida metro stop on Avenida Liberdad