Probably the main reason for visiting Port Charlotte is that the only hostel on Islay is located here. Port Charlotte Youth Hostel is run by the SYHA, and provides cheap comfortable enough accomodation. The key downsides are that it is closed in winter and has an 11pm curfew (a real pity since the local pub doesn't get lively until after 11 at the weekend) - try sweet-talking to the manager. The layout of the hostel also follows the usual pattern of Hostelling International hostels, with large common rooms and lots of separate tables creating a slightly antisocial atmosphere. That said you could do a lot worse than staying here. For any out-and-out whisky fans, the building the hostel is located in is the former Port Charlotte distillery, so staying here is a good way to complete a trip round Islay disilleries past and present.
If you are looking for a hotel, the Port Charlotte Hotel in the centre of the village has a lively bar and tolerable rates. There is another hotel located slightly out of the centre of the village.