Which neighbourhood in Lisbon?

There are three tourist areas in Lisbon: two hills with a valley in between. The hills are Alfama and Chiado and the valley is Baixa. Most restuarants and metro connections are in the Baixa and it is the most convenient location and easiest to walk cause its flat. The Chiado seemed very upscale to me. Alfama is more the old town and a little run down.

hello again! just posted reply on your spain question i believe. aaahhh......Portugal! My favorite country and Lisbon my fave city. Staying in Baixa makes for a good base. I have stayed several times at the Residencial Florescente (sp?). I believe Rick recommends this in his book. It's on a pedestrian only street with lots of restaurants and shops near by.
You may also consider staying in Bairro Alto. By day it's a quirky area with cafes and unique shops. By night...it's the place to be for nightlife! I have not seen anything like it. You walk everywhere, literally strolling drink in hand, tiny bar to tiny bar with seemingly thousands of people milling around the streets. I think it's quite possibly one of the best nightlife experiences I have had! Oh...and from there, move on to Lux around 3am to complete the nightly program! good times.

We usually stay in the Baixa district on a pedestrian street at Residencial Florescente. Check it out in RS Portugal book, also booking.com. It's walking distance to Rossio, Restauradores, Praca Figueira, and Praca do Comercio, four of the main public squares. Also near all transportation connections. It's on Rua das Portas de Santo Antao, a pedestrian street with many restaurants, and also a short walk to Rua Augusta, with more restaurants, etc. Can't really speak to any other neighborhoods. Enjoy your stay in Lisbon!

Thanks for your suggestions everyone. Looks like Baixa is definitely worth looking at! You've definitely helped me narrow it down. Christy - Your description of Barrio Alto sounds amazing. I can't wait to be there!

I love Bairro Alto. If you go there during the day and wander the streets, it is kinda quiet and you would have no clue what transpires at night there! They have kinda hip, artsy, boutique-y stores. Some cafes and restaurants. In the early part of night, you can find a place for dinner and to hear some fado music. Then it's late night...I would say about midnight (REALLY!) when the bars come alive. There are tons of them. It all centers on a about a 2 or 3 block area, doors roll up, small bars some not even with tables or maybe only 2 or 3 seats, get a drink, wander back outside, stand around amongst the crowds and drink and make new friends. Head to another bar, get another drink, repeat. We have joked it's like the United Nations up there b/c I have met people from all over the world. Guys on a bachelor party from Paris, surfers from Australia, somehow how I ended up playing matchmaker between two gay guys - one from Brazil and one from Germany, a girl from Columbia who had lost her friends and of course, locals from Lisbon. It is a blast!

Awesome! I just came across the Lisbon Poets Hostel. They have two locations - one with the dorms, another with the private rooms. Interested in the private room. Location looks good to me, but wouldn't mind some input. Rua do Duque, nr. 41 http://www.lisbonpoetshostel.com/public_html/homepage.php?lang=en