Haha thats where I was working up until last year!

When were you there? It is a hostel, just the site is rubbish and makes it look like a hotel.
I have been in almost all the hostels in Paris and I would recommend that one as its in montmartre - a really great area and you can get good double rooms there too. Or the ´young and happy´ hostel in the latin quarter - again really good area and lots of bars nearby.
One tip - go to the Sacre Coeur at night with a bottle of wine for an amazing view of Paris, theres a great atmosphere there too, loads of people drinking on the steps. Also rue mouffletard in the latin quarter has such a cool atmosphere - loads of bars and great kisches!