We strongly recommend staying at Pateo Santo Estêvão. The apartment we stayed in was completely up-to-date, well equipped and spotlessly clean. The location in Alfama is good, being quite near tram and bus routes, and about 20 minutes' walk from the nearest metro station. It's also fairly near an area where there are many little restaurants. If you are arriving in Lisbon by plane, we recommend that you ask Diogo to arrange for airport pick-up by Bruno, because ordinary taxis may have trouble finding the place and probably won't be much cheaper anyway. All in all, this was a very good experience.