I am traveling to Amsterdam and other parts of Europe with three
college buddies later this month. We have found a bunch of sites
listing hostels to stay in in Amsterdam but we would like first hand
knowledge from experience. Are there any hostels with private rooms
that you would recommend or warn against? Any experience staying on a
houseboat? Anecdotal evidence is preferred.

There will be four of us for a few nights, then we will be joined by
three more friends. Information on rooms that house four to eight
people would be especially appreciated. Thank you.

I was in Amsterdam a few years ago, went by train. What I found was a
number of people from Hostels in the train station waiting for dudes
like me (i.e. with backpacks on) so they could tell me all about their
hostel and even show me the way... What I would do is play it by ear,
Amsterdam has a lot of hostels, and if you hang out in the train
station for a little while I am sure that you can do one of the
following:
A) Find a few people from different hostels waiting to tell you about
them and show you the way
B) Find a few backpackers with knoledge of hostels in the area who
will prob. be friendly, and maybe even cute and ready for some fun...
<ahem>

I can tell you that I stayed in a hostel right on the outskirts of the
redlight district, walking distance to the train station. I found it
via method A :)

Aside from "wingin" it I can recommend Guide books like Lets go or
Lonely Planet.
Lets Go Guide:
http://www.letsgo.com/

Lets Go Amsterdam:
http://www.letsgo.com/AMST/01-Discove-154

Lonely Planet:
http://www.lonelyplanet.com/

Lonely Planet Netherlands:
http://shop.lonelyplanet.com/product_detail.cfm?productID=907&seriesID=1&seriesname=Travel%20Guides&

Let me just confirm jeanluis' comment by saying that I had a similar
experience at the Amsterdam train station: lots of people looking to
rent their hostel rooms or rooms in their homes, and lots of other
backpacker-types around. You can just walk up and talk to anyone. The
european travelers in particular find this to be the totally normal
behavior of communally-minded youth travelers. This won't be the case
at the airport, from what I saw of the airport. Still, just head over
to the train station and there will be lots of people around when
trains arrive.

Being a Dutchman myself,I know that there is a Tourist Office (VVV)
nearby the Amsterdam Central Station along the Canal. Nearby there is
a Boat Hostel. I don't know the prices.Good luck,Ask your questions
and most people will be helpful.