I've spent four days in February 2011 at the City Hostel Nürnberg. It's ok for a hostel: clean,…read morecheap, with lockers (you can by a lock for 2,50 EUR or bring yours) and a fully equipped kitchen, even a breakfast is optional for 4-5 Euros. Free tea and coffee and two drink vending machines make your life easer. But there is no comfy-zone or common room there: only one little couch in a corner and some bistro tables .
The owner seems to be nice, he tries to create a special atmosphere by backing waffles for breakfast and having a customer-friendly attitude. The big plus is that even when the hostel is overbooked, there are still options like an occasional bed.
Nevertheless the hostel is small, corridors and stair house are cramped. One of the unisex bathrooms doesn't have a lock. A huge huge minus in my opinion are the video cams in common rooms. I do understand a security concerns, but eating and cooking under surveillance was not so agreeable.
Weekends are little noisy, because of the bars downstairs. But on the other hand you are in the middle of Nurnberg's shopping/ museum / bar&club mile. So why stay inside?
City Hostel definitely better than the Let me Sleep-Hostel! Cleaner and quieter. So let it be your first choice.