Hostels
Bulgaria is well catered for with backpackers hostels, however in the capital Sofia you will see signs saying 'hostel', which are really guest houses with private rooms. Whilst these are useually good value compared to hotels, they do not offer the 'backpacker experience' which you may or may not want (depending on how many late nights recently :)
Places such as Veliko Tarnovo have quite a number of travellers hostels in the town, so you can pick and choose depending upon the season, however if you visit somewhere a bit less visited and harder to get, such as Smolyan you will have limited choice and may even have to find a cheap hotel or guest house.
Below are links to some hostels in Bulgaria:
Sofia
Hostel Mostel, which also has hostels in Veliko Tarnovo & Plovdiv is has a great backpacker atmosphere & great staff in my opinion. I have only stayed at the Sofia one last November, but would reccomend it.
More being added to this page soon, or you could search the site for more hostels.