Trey's Lareina Oaks guesthouse is perfect!! It's in a quieter part of Austin but super close and convenient to everything, just a short 10-minute drive to South Congress, downtown, and beyond. The Larenia Oaks neighborhood is very neat, check out the Cathedral of Junk!
The guesthouse is brand new, private, overlooks a green backyard (with hot tub), and is very tastefully done (modern, open and airy, and super cute with nice Texas touches). It sleeps three people easily with the upstairs bedroom and downstairs futon in the main room. Very convenient if you're renting a car, but renting a car is also not completely necessary since you can get anywhere in Austin easily with carshares.
I recommend this place for anyone who wants to be close to everything while having some peace and quiet (and space) at "home" while visiting Austin.
And Trey is great--very responsive, very nice, and very helpful. Wish I could have gotten to know him more :)
I definitely recommend!