Stay at the Original Casa del Mochilero! It is the one of the best backpackers in South America. The people who work there are so friendly. The showers are hot, there is a good communal tv/dvd room, a shared kitchen, a shared dining room, comfortable beds. What more could you ask for? It is in a good location, Miraflores, walking distance to the Vivanda Supermarket which makes fresh squeezed Orange Juice every day, walking distance to the waterfront, and to bus stops taking you to the city and to other neighbourhoods. A lot of travellers we met didn't like Lima at all, but we loved it, and I think one of the reasons is that we stayed at Casa Mochilero. Also in the trendy neighbourhood that begins with a B, I think there is a very good Fair Trade Coffee shop that also has a section of Fair Trade souveniers.