[QUOTE=always_delayed]I stayed at the Westin Palace for vacation over Thanksgiving last year. It is a fantastic hotel and yes, walking distance to a lot of great spots. Specifically Puerto del Sol, with a lot of great shopping, pubs and restaurants.

Hotel Urban
Another hotel suggestion, just one block up the street from the Palace- and across the street from the Cortes, is the Urban. A very cool botique hotel- part of the design hotel group. Worth checking out - Like the Palace a great location for the tourist events and short walk to the gay neighborhoods. Just ask for a higher floor facing the main street rather than the side streets as the side streets echo the noise pretty badly-

You'll find a variety of good restaurants nearby and on the way to Chueca, but all of them surprisingly expensive. I sense Madrid is expensive to begin with and for those of us exchanging from dollars- it's even worse.

Good luck and enjoy- a great city!