We just came back from our first trip to Oaxaca and stayed at Los Arquitos in the small room with the double bed (#2) on the first floor. It was just right for us.
Internet - works well and unlike many places I've been to in Mexico, it was consistent anywhere in the B&B, including in our room.
Hot water - plenty of it, and great water pressure in the shower.
Cleaning - even though we had the special for 60/night including breakfast for two which was supposed to have cleaning every 5 days, we had cleaning every day (more toilet paper, changed towels, made bed, emptied garbage and fresh drinking water every day).
Breakfast - breakfast is light: coffee, tea or hot chocolate, a juice, yogurt and cereal and a basket of sweet pastries, but honestly, there is so much good food to eat in Oaxaca, you don't want to weigh down on breakfast, so this was perfect. Served at 9:00am.
Room: our room didn't have a lot of free space, but that's what we were paying for - if you want more space, ask for a room with a kitchenette. The room came with a fridge though, and a closet to store things. If you're the type to not spend a lot of time in the room, this is a great place.
Finally, Juan and Patricia were very helpful. They will help you to do research, call places, book taxis or cooking classes, you simply have to ask. Juan speaks very slowly and clearly, so if you don't speak Spanish, this will be helpful (I only spoke to him in Spanish, but I noticed he could speak English to my husband).
The location: about 10-12 blocks from the main square, and 2-3 blocks from the large garden/park where there are plenty of food stalls. If you go for the food stalls, check out the Argentine guy selling Argentine chorizo on a bun - delicious!
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