Loads of Guesthouses on Kao Sarn road, near the Grand Palace and Banglumpoo market. Popular amongst backpackers. There is also a gay club called Sake around the corner ( not sure if it is still open ).
A better hotel in the same area is Royal Hotel
http://www.asiarooms.com/thailand/bangkok/royal.html located at a corner of Sanam Luang ( a field opposit the Grand Palace ). A short walk to Kao Sarn road, and also to a boat station. Wung Saranrom, a small park full of rent boys is also in 10-15 minutes walk.
Oh, and if you do stay in this area, don't forget to visit Wat Borvornivet ( between Democracy monument and Banglumpoo market ) where the King spent time during his monkhood and where the patriarch has resided. This wat also has a secondary school for boys where I studied for 6 years.
