We, group 5 people (3 Boys + 2 Girls), visited Pondicherry in Jan '14. We stayed in Auro Ba Cottage (google search result).
This is a small cottage located near Auroville Beach. It is 8.3 KM from railway station. But if you go for rental bikes (which you should-triples the fun), that part is not a problem.
The place is very near the beach (3 min walk), and pretty quiet
Great rooms(read cottages)
Nearby restaurant - (you can order here also, they brings the food from the rest. only)
If you are visiting in Summer, keep a good-knight oil, (avoid coil, or anything that cause fire - or use cautiously)
Fan speed is not good. (but in Jan - who needs it)
You have to give a advance amount via transfer.
Contact No : +919751396129