Great place with beautiful view as advertised. Alfama is a good place to stay, at least for a first visit, because it is both picturesque and quite quiet compared to some places like Bairro Alto.
I recommend getting a ride in with Bruno, the cab driver that Diogo and Mariza work with, as he is both a good cab driver but also a very helpful guy in general -- for example, I had left some medicine at home accidentally and he helped me get a refill from a local pharmacy.