would £650 pounds be enough for 2 people to stay within Hong Kong for 7 days?

£650 would be about HK$7528.3. That make your budget HK$1075/day.

Hostels in Hong Kong cost anywhere from $350 to $600 a night, depending on location. Check online (ie. http://www.hostels.com/hk.html).

That leaves you with HK$475 - HK$725 to spend on food, transportation and entertainment.

Western Food in Hong Kong are expensive, so you'll be dining at local/street restaurants and fast food chains (ie. Cafe de Coral) a lot. You should also check out the food courts at major malls. They usually have good local food at very affordable prices. Bottled water will add up, so if possible bring your own water bottle and boil water at the hostel. Try congee in the morning and noodles for lunch, and try to eat when the locals eat. Not only will you be able to save money, but you'll get to try out some of the local delicacies.

Transportation is actually the cheapest if you stick with ferries, MTR and buses. The cheapest way to cross the Victoria Harbor is by ferries, which under $2.50 you get a nice ferry ride and an awesome view of the harbor. Also, get the Octopus Card. You can get one at MTR stations and most 7-11s (if I remember correctly). You can use the Octopus on the MTR and bus, which makes it easier than carrying a bunch of change. Another way is to walk. It's not difficult to walk from Central to Wanchai to Admiralty to Causeway Bay to Sheung Wang. Though they are just one MTR station apart, but they are all within walking distances (I did that once - I got lost and end up walking). Likewise, you can also walk between Yau Mah Tei, Mong Kok and Tsim Sha Tsui (though a longer walk).

But do know that with such a budget, you won't be able to enjoy many things in Hong Kong, ie. the Big Buddha in Lantau Island, the Victoria Peak Tram, train out to the rural villages in New Territories, ferry to Lamma Island and other old fishing villages, etc.

In other words, your budget is doable, but your trip won't be enjoyable.

It depends on how much you spend. Don't spend too much on shopping!

it wil be abt HK$7500.... mmmm, c how much u pay 4 the hostel really as hotel u definately can't try. 2 expensive! hostel in HK charge fr HK$350 up. saying those not v gd quality 1. so assume ur hostel = HKD$350 per nite. 7 days / 6 nites wil be HK$2100. so u stil hv $5400 left. $5400 is gd enuf 4 food / transportation in HK as those r cheap. just dun goto those luxury rest. wil be absolutely fine. a set dinner in those local rest. HK wil be abt HKD$40-60 only. even including coffee or tea. n transportation - mainly our tube is cheap also. chk out the fares.... http://www.mtr.com.hk/jplanner/eng/planner_index.php

If you can find a cheap place to stay you could get by on that amount.
You can eat cheap, use public transport, but it can be very expensive there.

err....stretching it a bit.

in fact stretching it BY A LONG LONG way..