If you act fast, roughly $90 (just over 60Euros) return by air, tax inclusive, each (make sure you don't get a flight that leaves earlier than the time you can get to the airport if there's only a few Euros in it).

If you go by train you're looking at a 5 to 7 hour trip which may not be much cheaper (lots of mountainous terrain between the two cities - they're currently constructing a faster link, but it will be a while before it's ready.) Most trains are 65.80 each way (there's a 20% discount on a return trip - you might get an additional discount if you can get an under 26 card) there are overnight trains that leave Madrid at 10pm and arrive at about 7:30am - those are 38.40Euros each way (again multiply this by two and remove 20% for the return price). Details on www.renfe.es.

BUS: a bus will take 7.5 hours, they depart throughout the day right up until 1am (there are about 5 overnight buses which get you there in the morning) - cost is 46.71 Euros return or 25.95Euros for a single journey http://www.alsa.es

You might find the cheapest/best value way to get between the two cities is to get a bus in one direction and a flight the other.

I've found that Hostal prices in Barcelona can be marginally lower than those in Madrid - you may find that the savings in Barcelona mean that effectively, the cost of going there and back by air is only about $60 or so more than it would be staying exclusively in Madrid (and that's WITHOUT the day trips to Toledo or the escorial)

I wouldn't expect to pay more than 40Euros for a double room in Barcelona.

In Barcelona I stayed at Pension Iniesta a few years ago (it was convenient for Montjuic where the Primavera Sound Festival used to be)
http://www.pensioniniesta.com/ doubles are 38Euros a night with shared bathroom.
I remember it being very clean, but a bit noisy and the curtains didn't shut out the light - but as I'd taken earplugs and an eyemask, this didn't bother me at all.
Although it's good for Montjuic, it is very close to a Metro station, so getting around to other parts won't be a problem.