There are not many places for a budget traveller to stay in Lhasa, and Tibet for that matter. Some cities outside of Lhasa requires foreigners to stay at pricey hotels, rather than hostels and guesthouses for locals. The first night, we paid 300 yuans to stay in a nice but plain hotel with no view. The second night, we found a nice and clean guesthouse (60 yuans), but it was hard to find at first. So the only good direction is pass the Yak hotel for a few blocks and turn right. Oh Dan is situated in the center of a market/neighborhood. They also have a nice rooftop teahouse with spectacluar views. When we stayed there, we had mixed views from some people that stayed there. There were two british ladies who had to pay everyday that they were there, but we were allowed to pay the whole sum when we checked out.
Another backpacker was given a room with 7 beds, and other packers were told that the guesthouse was full at the same time. Our room had paper-thin walls and were nicely situated next to the restroom and the apartment next door, which was at most 2 feet away from us. Take showers in the afternoon if you like hot water. Despite all this, the next time I go back to Tibet, I'd definitely stay at Oh Dan's. It's cheap, the people are nice if you're nice to them, and clean (unlike some other places). It gives a great view of the Potala Palace and is 300m away from the Jokhang. Down the road from Oh Dan is a public temple with none of the crowd. You can truly experience Lhasa when you're immersed with the locals.