What town should we set up base: Dingle, Kerry or Killarney (or some other?) Any suggestions on accomodations for 3 people?
Kenmare is great for visiting all of the southwest peninsulas, if you feel you must stay in only one location. Virginia's Guest House is centrally located and very reasonably priced. If you decide to split your overnights between two locations, Castlewood in Dingle is lovely and it's an easy walk along the bay into town.
We absolutely loved Dinge, and used it as a base for three nites. We wished we had planned more time there. We stayed in an awesome B&B (Towerview...get a room with a view of the bay)ju st outside of town and walked in every day/nite.
Dingletown is great, and Dingle peninsula is beautiful, relaxing, etc. But, it is out of the way. If you're going to Dingletown, you're going to see Dingle and not as a quick drive through kind of experience (not that you were planning that). We stayed at the Pax House in Dingletown, which was just incredible. Lovely owner, beautiful home, outstanding breakfast, and because I work online and take my work on the road - great wifi from the living room (which also has a beautiful view of Dingle Bay). Hope that helps and have fun!!