Just returned from Easter in Naxos Town. If you are looking for reasonable accommodation in the quieter part of Naxos Town give Pension Sofi a go. It will take you no more than 10 mins to walk to the waterfront and Rena, Thothorese and Panyiotis are wonderfully friendly and accommodating hosts.
Pano or Thothorese will meet you off of the ferry or aircraft and they can arrange 'no grief car' hire. We had a newish Fiat Panda which was absolutely perfect for this smallish island.
One or two nice little restaurants in the lower backstreets of the Castro also. Go looking, not everything is on the watrefront although Dioginis proved to be our very favourite watering hole.
Old Tiger Guzzler