We had a great time here and wished we could have stayed longer. The best thing about this hostel is the shared terrace with amazing views of the city all day, especially dawn and sunset. We arrived on the evening of New Years Eve and paid a little extra for a room with a view on the 2nd floor, rather than no views on the 1st floor and we were so glad we did. The fireworks were amazing of course! Plus we didn't have to deal with the normal nightmares of NYE with everything we needed right there, including a guitarist and some other travellers having fun.
Henry, James and all the staff are really friendly, and we loved our double bed room with en-suite and a wide window onto the view of Cusco to wake up to. I think good hostels fall into two groups, the quirky, relaxed ones that make you think of a classic backpacker trip, and the new, quite sterile, types. Samay Wasay is the quirky kind. It's clean, the beds are comfortable and the water is hot, and at breakfast large flasks of hot water are on the tables so you can make Coca tea. We found it to be great value.
I saw some other people complaining about having to walk up stairs to get to the hostel - well it's only about 10 mins from Plaza del Armas, uphill, and we did it with a backpack each and it was fine. I think if you want a 5-star hotel, then go and book that for yourself.
If I came back to Cusco, I'd definitely stay here again, and have recommended it to several people we've spoken to.