Hostels featured in a newsweek.com blog post:
...many hostels are surprisingly well-suited for families. Double room options are becoming more common in hostels in Europe, for instance. Many have kitchens where some meals can be prepared. Some hostels have bicycles, kayaks, and other equipment that guests can use for free.
One tip: Only book at a hostel that's been favorably reviewed online at a site such as TripAdvisor and Hosteling International. For example, Hosteling International's San Francisco hostel received many favorable reviews on TripAdvisor, but those reviews also contain some warning signs for families with very young children.
Does Hostelling International have a reviews site?