The accomodation is just across the road from the university. Pretty close to shops. About 15 min walk from the city centre.
The reason why I stayed at the residence was first because it was close to Uni (I'm a lazy bugger) and for the atmosphere in the residence. There is always someone around you, you're never alone, you just have to open our door. But you still have your own space. The mix of european students is such that you end up learning a different language than you are supposed to. I was sharing a flat with a spaniard and a dane, spent most of my time with italians and english speaking people from all over the world. To make the best of your stay, I advise to ask to share a flat with one or more spaniards. It just forces you to think in spanish and you'll learn an awfull lot more about everyday expressions, improve your confidence of speech, well trust me..
On the other hand, as mentionned before, the cost of staying at the residence is the double of what you would pay for shared accomodation in a private flat. So my other advice is to stay at the halls for a month, if you like it stay, otherwise look for a flat. The student union (junta de estudiantes) have got a department that will help you looking for flats (they usually have a list of flats and students that are looking for flatmates (both spaniards and foreign students))
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