Look for guest houses at Auroville. It's worth every penny you're spending and the main city is not too far from there as well. 10 to 12kms can be covered in just 20 minutes. Moreover, you can hire scooty or a bike from these taverns.
Cheers:)
happy journey.
Prefer to take room near rock beach, that's where you want to be during night to enjoy all the nightlife of Pondicherry.
it's lively there during late evening.