This is one of the nicest hostels we stayed at on our trip. It was only about 5 minutes from the bus station and then 10-15 minutes to both the castle and the lake itself. The reception was very friendly and helpful and our room was very clean. We had a private double on the top floor with our own bathroom and it was great. The breakfast in the morning was included and it was good, too. Be sure you're ready to check out by 10AM instead of the standard noon for other hotels.
I have been to this hostel twice. There are a mixture of dorm rooms and some private rooms for families or small groups. The dorm rooms are a bit gloomy but great for a youth hostel. Very clean and good basic breakfast on offer. They also offer evening meals but we did not eat there. It also has the benefit of a bar which you do not always get at youth hostels. It is great for Bled - only 5 minutes walk and only 20 Euros a night - an absolute bargain!
The hostel is in a lovely quiet area. It has a selection of room sizes all with en suite. The beds are very comfortable and the rooms are spacious (once they are not full to capacity). Three of us stayed in a 4 bed room and we had plenty of space. There were two large wardrobes but unfortunately not enough hangers, however, I am sure if we asked they would have been provided. The rooms are warm and cosy. The shower cubicle in our en suite was a little small but the shower head was good. No toiletries apart from liquid soap are provided. One small towel per person is provided.