Berlin for a Happy New Year

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Hay guys, there is a group of 7 of us taking advantage of Lidl's great flights deal with Air Berlin (£19 each way), and after deciding against Barcalona and Milan we've decided to spend 5 days either either side of New Year in Berlin. We have heard that the old east of the city has the best underground clubs etc. We are all dance music lovers. Do you think it'd be best to stay in the East? We will be hostelling it with a budget of about £10 per night. I've seen one hostel near Zoo station for £7 per night. I've seen Cristianna F Vir Kinder Von Bahnhoff (sp - sorry) Zoo, which doesnt give that place a good name! is it still that minging around there? any advice on things to see, places to stay and clubs to rave the night away in will be greatly appriciated! i havent been to Berlin since the wall came down.