Budget hotel and bar, with inhouse dealer by now, definitely smokey with a low ceiling, live music every day, usually from the same group of musicians. Great place to meet all those young tourists drooling over amsterdam's culture, 'cos it's nearly in the redlight area, close to central station.
Check their website for some pictures and more info. The sign "don't put your cigarette on the pool table" says it all, I'd say.
UPDATE: this bar has moved to Leidseplein area