We stayed here for about a week and overall it was great.

Pros:
Location: Steps from Plaza Mayor (described by one online guide as Madrid's center of energy. Walking distance for nearly everything in Madrid's historic central district. The street itself has several restaurants that are literally right outside the door.
Quiet: Despite its central location, the flat is very quiet due to excellent soundproofed windows. Madrid is a town that likes to stay up late and have a good time, but you can shut it out if you don't want to stay out to the wee hours.
Cool: Flat has air conditioning, which we put on at night when we closed the windows. It was atypically cool in Madrid while we were there, so didn't need this during day.
Clean: The place was spotless when we checked in. I only wish my own home were this tidy.
Awesome Wifi. I got 75 Mbps at the flat, which is higher (and more reliable) than what I get at home in Silicon Valley
Helpful, friendly hosts: Alberto met us and got us settled in. I interacted with him a number of times over the week and he was always helpful and we were able to communicate effectively through the magic of Google Translate, because his English is somewhat limited, and my Spanish is near non-existent. He made a number of recommendations for places to eat or things to see and they were all terrific. They left a tray of water, olives, chips, and wine for us when we checked-in. Really nice.
Madrid: Hey, the flat is in one of the nicest, hippest, most historical cities in Europe. We had a blast in Madrid and look forward to second visit. If you can't have fun in Madrid, you don't have a pulse.

Cons:
Floor: The flat is on the fourth floor, accessed via a very small staircase, which can be an issue. We didn't mind the up and down generally, but luggage was a challenge; checking in, Alberto did yeoman service by carrying our one *very* heavy bag up; checking out, we actually removed half of the stuff in the suitcase and made two trips.
Size: The flat is ... cozy. More so than I realized when I booked it. It worked out for two people, but recognize that there's not a lot of spread-out room for luggage, etc.

Overall, it was excellent. This was our first experience with airbnb and it worked out really well. I thought it was much better than a hotel, and definitely lower cost for what we received.