I have patronized the whole spectrum of hostels...ranging from nice, private "pods" in Piccadilly to noisy, ransacked lofts above bars.
Great article Craig...I would have to say the most important to me are 1, 3, and 4. Price obviously because I'm a broke, budget traveler, but location is probably my first priority - I have to be able to walk everywhere! Besides, why settle for a cheaper place in the middle of nowhere when you have to pay for transportation to get into town twice a day?
Staying in a hostel in Temple Bar, Dublin a guy wandered in piss drunk at 03:00am, woke up everybody in the room trying to get into their bunks (it was dark and he couldn't remember which bed was his) then pissed in the corner (we could smell it all night) and satisfied himself with sleeping in the middle of the floor. My worst hostel stay ever!
Part of the fun of staying in hostels is the character/personality/atmosphere of a place. Some places, like the hostel I just stayed at in Chicago, have all the charm of a Motel 6....but others have corridors where you can write on walls with sharpies, rooftop gardens, rabbits that run wild around the place, etc. I love it! There is no better place to meet friendly, like-minded people....I don't think I've ever stayed in a hostel alone and not left with at least a few new friends and email buddies.
Point #11 that didn't make the list is....depending on which part of the world you are in....the number of Scandinavian girls staying there, haha.