My family of five stayed in this beautiful and elegant apartment between Christmas and New Year's day. It has a fantastic view of the city from its panoramic living room windows.
The apartment is in a residential neighborhood atop one of Lisbon's famed hills. It's across the street from a lovely park including a playground. It isn't as lively (or loud) as Chiado or Bairro Alto, nor as picturesque as Alfama. But spending a week there gave us a good sense of how Lisbon natives live. There is an excellent grocery store a block away and several pastelarias for coffee and pastries. There is even a top fado venue around the corner.
If you like walking, which is the best way to see Lisbon, you can walk down to the city center squares like Rossio in 10 minutes. Climbing back up may take 15, but you get used to it. Or get a cab from downtown for about $6. Cabs in Lisbon are plentiful and cheap. Getting to the apartment from the airport is only $12.
This is a great apartment for a family or small group.