There's good and bad news when it comes to nightlife in San Telmo. First, the bad: the streets are pretty desolate at night, so leave your valuables at home and proceed with caution. The good: things are less expensive and pretentious than in Palermo and Recoleta. 
Places like Gibralter and Freedom Cafe, which attracts a gay crowd, may place less emphasis on perfect lighting and hitting all the right interior-design notes, but the social benefits-you'll find a greater number of locals, expatriates and tourists mingling here than anywhere else in Buenos Aires--more than make up for the lack of decorative touches.