There are business hotels, luxury hotels, traditional guesthouses and luxury inns, but there's nowhere like a capsule hotel. With space at a premium (especially in the center of Tokyo), these are more or less like coin lockers for people, but cosy and comfortable lockers. The stereotype that they're only for drunken salarymen who've missed their last train is a false one; they're perfectly legitimate places to stay for tourists, business travelers and job or university interviewees. And you'd be hard pressed to find a cheaper, better place to stay in the beating heart of Tokyo.
The location really couldn't be better: it's just off Yasukuni-dori a few minutes' walk from Shinjuku station (the world's busiest), with connections all across the city. There are a wealth of eating, drinking and shopping options nearby and a convenience store not a minute down the street, and it's close to sights such as Shinjuku Park and the city hall observatory with its panoramic view of the city. Despite this, there's no noise from the street to disturb your sleep; the only annoyance in the area is the persistent touts for hostess bars who'll accost you late at night.
There are four floors of capsules, three for men and one for women: my capsule had a TV inside and a panel at the end with an alarm clock and controls for the light and TV. On the fourth floor there's a lounge with a counter selling light evening meals and drinks, and big comfortable chairs to sink into in front of the TV; nearby there are washing machines, coin-operated PCs for guests without a laptop to take advantage of the free Wi-Fi, and vending machines for soft drinks, snacks and alcohol.
As well as the showers and fun romanesque statues, the mens' bathroom has a sauna (with a TV to watch while you steam!), a hot bath, a jacuzzi and, for the full authentic Finnish sauna experience, a cold bath; in the interest of research I dipped myself briefly into this, and found it to be very accurately named, allowing the other men in the bathroom to hear some new English words.
There are helpful English explanations for most of the facilities, and some of the staff can speak some English; the only thing that wasn't immediately clear was at check-in, when I needed to exchange the key to my shoe-locker (shoes off at the entrance) for a key to my main locker. The lockers are standard size, so anything larger than a day pack will need to be left in the storage space near the entrance.
Capsules are just ¥4200 a night, which for central Tokyo is a steal. I wouldn't want to stay for more than two or three nights, but for a short time, it's a cheap, convenient, rather fun and uniquely Japanese place to stay.