ShanghaiHostels
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Captain Hostel
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Fuzhou Rd, next to the Bund
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Bad service
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Good for getting out of "jams", hehe.
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Hiker IYH
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450 Middle Jiangxi Road (north of the junction with Nanjing Lu)
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phone number is 63297889
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RMB 50 / dorm bed.
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"good hostel, clean, the dormitory furniture looks new, lockers in the rooms, free internet, a good common room/bar, really good atmosphere, friendly staff and only 50 Yuan per night."
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http://www.hostelz.com/hostel/39032-Mingtown-Hiker-Youth-Hostel
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(Random Place I walk past sometimes)
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Located on Jiangyang Road, just west of People's Square behind the JW Marriott
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Next to the Jiangyang Pet Market/Street
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I know nothing about this place, I just walk past it every time I go buy chinchilla food
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Great location, but sketchy history (closed down, reopened as a bar, now back as a hostel and denying they ever closed)
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If you're two people or more, it might be worth the upgrade to a cheap hotel. Shanghai has several chains of the cheap-but-good type, which I will list below with the approximate price for a standard double:
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Jinjiang Inn (RMB 230)
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Home Inn (RMB 210)
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Motel 168 (RMB 168)