hotel in Mexico City - which area of town?

You'll not likely find everyone agreeing on what part of the city is the "best" - because we each have our own criteria/expectations. Centro Historico is fine by day when you pay attention to what you're doing and others around you, but after dark - it gets a bit deserted and the danger level rises markedly; there are some restaurants open there at night, though. Most of what there is to see/do for most people probably isn't located in Centro Historico, and, that and the after-dark security issue are the principal reasons I recommend against staying there; you can get there easily by public transport (or by walking) from other parts of the city whenever you want to visit something. A hotel adjacent to Paseo de la Reforma or in the Colonia Roma/Condesa areas are what I suggest - Colonia Roma is my first choice, because it's close to daytime, and nighttime, opportunities (and it's considered a safer area than Centro Historico). Zona Rosa hotels can be pricy, but it's the city's live entertainment district (probably 8-10 places on one street alone with live bands most nights of the week). Click here to read a "Mexico City Hotel" discussion thread, which includes not only hotels in Colonia Roma, but in Centro (and elsewhere) as well. Knowing your budget range will help people make a recommendation.

A few weeks ago, I stayed at Hotel Catedral, which seems to be the default recommendation for Centro Historico. I thought it was good value, at 500 pesos/night if you pay cash. Next week, I'm staying at Casa de la Condesa, which also comes highly recommended.

Centro Historico is kind of quiet at night, yes. Roma or Zona Rosa have more going on, and don't feel quite as deserted at night.

Thanks for your quick response Longford!

You are right, I forgot to include my budget! We're looking for a midrange hotel. For what I've seen so far, somewhere between $50- $80 a room/night seems reasonable.
Your advices against Centro Historico and in favor of Colonia Roma make sense to me. I will have a look into the other thread you mentioned.

Casa de la Condesa.

Hotel Catedral is going to be the choice if your budget suits with it.

Colonia Roma isn't the safest spot in town either, although its not terribly dangerous. Except near the popular clubs and restaurants its as deserted and dark as the Centro Historico. Radio Taxis are so cheap in general you can pick out almost any restaurant you want to visit (within reason) out of your guidebooks. Even with the 20 peso start on the meter, a radio taxi from say the Centro to a Condesa restaurant won't run you much more than 50-60 pesos and tips aren't expected so by most country standards its still a bargain. No matter where you stay though there will always be at least a Mexican place open until the wee hours within a few blocks, plus the world's greatest tacos on the street, although you might want to be cautious in eating those.