Hey Dleens,
We are currently in Trincomalee right now and the accommodation choices are SCARCE, to say the least. Most places listed in the out-dated Lonely Planet no longer exist. The only hotel everyone in town keeps directing tourists to (which is just me and my girlfriend at the moment) is Green Park Hotel in Trinco. Standard rooms here are $20 - $30 with A/C. However, they do have rooms available in a satellite building down the road (where we are located) for $11 a night with fan and attached bath.
As for Nilaveli, we ventured there by bus yesterday and found no budget accommodation. Everyone pointed us to the Nilaveli Beach Hotel, which is $60+ per night for an A/C room. Other than this option, there are not many to choose from. The Mauro Hotel (just north of the Nilaveli Beach Hotel by 10 minutes walking) is $30 per night for fan only. Most of the places are resort type hotels. There are no restaurants or shops in Nilaveli, so if your looking for an all-inclusive resort getway this might work for you. Also, because this area is a "tourist" location, prices for everything are jacked up! We tried to by bottled water there yesterday (marked at 65 Rupees), but was trying to be sold to us for nothing less than 110 Rps.
The book lists the H&U Guesthouse as the only "budget" accommodation, however, this guesthouse is nothing but a pile of rubble strewn out on the floor now. Most places in Nilaveli seemed abandoned.
To be honest, the beach at Trinco is really nice, the people are extremely nice, and for $11 per night it's a win-win situation.
Hope this helps... good luck!
FishRich