Good place to stay in Penticton.

I'm a little bit embarrassed when this question comes up as I live just 40k south of Penticton but really can't offer much input. 

Ask me any other time of the year and I'll give you lots of suggestions but unfortunately accommodations for the week either side of IM Sunday is usually booked well in advance.

However as Van City said, there are other local communities fairly close if being right next to the exciitment is not that important.

There are a huge number of B&B's along the road to Naramata that could get you anywhere from 1 to 15km to start line.
Summerland (North and across the lake from Naramata) is on Hwy 97 that is only ~10/15 min. to start line.
Kaleden which is also just off hwy 97 is about 10 min. South but I believe only has B&B for accomadations. 
OK Falls which is another 10 min. South has a couple of motels and many B&Bs.

For the record, I live in Oliver and the times I did IMC I was able to easily make it to race start area in under 40 min. (if you wanted to venture that far.)

Having said all the above there have been many noted cases where people have found last minute accommodations because of cancellations. 
However, I only recommend this if you are a gambling person.

Good luck!