I highly recommend staying in Peleliu at the Dolphin Bay -- you will have a terrific experience. The location couldn't be better. You are surrounded by all the best dive sites Palau has to offer with the furthest boat ride maybe 20 minutes at the most. The owners of Dolphin Bay are Godwin and Myumi. They are wonderful people and have created a very nice dive resort. It has be a number of years since we have been there, but friends went this past summer and couldn't stop talking about it. The accomodations are a bit rustic, but clean and nice, and the food is very good. If you go, be sure to take the World War II tour -- Peleliu is the site of one of the longest and bloodiest battles in the pacific. The tour can be done after diving.