QUOTE(Caro! @ Nov 28 2006, 01:42 PM)

ncy123,
sorry I don't have any good info about hostals. I know Punta del Este is a very beautiful city, but expensive! So good luck trying to find anycheap accomodations there. In Santiago you won't have a problem. It is a big city and I'm sure it has several hostals. I will do some research and get back to you as soon as possible.
Caro!
The Bella Vista hostel near the big mountain in the city centre of Santiago is really good and a heap of fun.
I stayed at their sister hostel just round the corner (which is slightly quieter), but your free to move between the 2.