We stayed in the Olduvai Inn in Arusha Tanzania and it was fine. The rooms were clean and it's really good value. We were the only Ugandans staying there (in a while I would say) but of course that's not a problem.
Not too many safari sellers down that end of the street, not like in the centre of town, which was a relief as they can be a pain.
Nearby is the Blue Heron which is a great garden-set restaurant type place and we really enjoyed lunch there, and it turns in to a cocktail bar by night. A reason to stay at Olduvai in itself.