I spent an amazing week at the El Diablo Tranquilo hostel in punta del diablo. A brand new hostel and restuarant that are both very well run and by far the nicest in town. If you are a beach person it is a must see if you visit Uruguay, and a perfect spot to break up the trip if you are heading to or leaving Brazil. As a surfer I got some really nice waves without the crowdes you might get in Brazil or punta del este. I was there in low season so there was not much going on in terms of nightlife but that was what I was looking for. Rooms are clean, and I really like the communal feel of the hostel. The restuarant is hands down the best in town and a great option if you are tired of cooking. The owners really went out of there way to help me out by contacting people from out of town to get my surfboard fixed and even went as far as driving all the way to the Brazilian border after I missed my bus! If you are a beach lover, surfer, or just want to get away from the city life, I highly recommend El Diablo Tranquilo to all budget conscious backpackers.