Personally, I'm most fond of hostels with character. But sometimes (and especially when you're in a city/town) it's nice to find a well-run place to stay where everything's proper. And that's AQ Hostel for you.
It's very recently refurnished, so everything is nice, clean and in good shape. It's not luxurious, just proper and tidy. They're a bit more expensive than others, but bear in mind that they're located smack-bang in the middle of town (even though Queenstown isn't large, it's one of the most expensive places in NZ when it comes to apartments etc.), and it really IS ship-shape in all ways. And to my delight, I discovered that they've changed the 6-bed dorms into 4-beds; that extra space makes it a lot easier to pay those extra dollars.
The staff is also a pleasant bunch, and from what I could gather it's because the owner goes the extra mile to ensure that they like working there. It's working, and the result is a place where you can relax and never feel like there's too little space on too many guests.
Oh, and the balcony is great for evening beers or a mid-day tan :)