Hiroko Tabuchi's NYT article exploring capsule hotels is indeed very interesting but he missed out another, perhaps more interesting, 'home' for travelers and homeless in Japan, the internet cafe. How does that work?
You need to take a membership at the cafe, for a fee of some 800 yen (it works more like a coupon, you pay less in each subsequent visit). You would need to pay this membership fee even if you are planning to hop-in to check your email for 10 minutes (thereby effectively preventing short-time customers). I find it sorta deception as it has been written in big letters "100 yen for 10 minutes". Anyway, I think the cost for browsing alone is very outrageous (6$ for an hour!). If you take a membership, they will take your photograph and scan your alien registration card or passport, if you are a foreigner, for security reasons. Upon registration, they will provide fresh linen and a IC-tagged card (credit card sized) for free access to pantry.
Alloted cubicle was not very different from a normal office cubicle, 6 sq. m area, 2m tall screens and open ceiling. Cubicle had a door but you cant lock it. In addition to a small table, PC and accessories (headphone with mic, TV tuner), the cubicle had a good, ergonomically adjustable chair (that I really liked) and a couch with small pillow so that you can comfortably lie down and spend the night.
Pantry had a good stock of drinks (cold or hot soft-drinks, beers, Japanese Sake and sho-chu) cup noodles, corn flakes and chips. Everything is served by electronic vending machines (as seen elsewhere in Japan) and service was excellent. Cafe au latte and chips didn't disappoint me at all.
The place was quite packed, there were many girls as well, but I didn't see any foreigners besides me. Despite it being crowded, it wasn't noisy at all that is a big plus, but quite filled with tobacco smoke which is very nasty. Plenty of toilets and showers, very neat with fresh supply of towels and stocked toiletteries. Coolest thing about shower is that it had a radio to listen to!
Cafe had a library full of Japanese manga and it had, of course, no English books. I discovered that night that most of the manga had furigana (hiragana on top of Kanji), so if your Kanji ability is very low, you can still enjoy reading them.
Over all, the place had quite good facilities and generally neat, but tobacco smoke makes it not comfy at all. If you spend lot of time accessing internet and you didn't bring any gadgets to access it (say iPhone or Laptop), this is a place to be considered for a frugal overnight stay. I couldn't sleep good that night anyway, blame the tobacco smell all around, and decided not to check-in for staying overnight next time.
I didn't try their free breakfast as I left early in the morning; with jacket and rucksack stinking tobacco and my head with all the comfort and sleep that I missed the night before.
Here are some videos of Japanese net cafes if you are curious to have a look.
Reuters ran a feature article on Japanese cyber cafes sometime ago, accessible here.