Kehei and Wailea are good choices for where to stay, as are Lahaina, Kaanapali, and Kahana. Typically Kaanapali is the most expensive place to stay as the beach is lined with big resorts/timeshares, but it does have the advantage of lots of places to eat within walking distance so you don't have to drive everywhere. You don't really want to go any further than Kahana, as the weather can be dicey in Kapalua (near the Ritz).
For diving options, go to Ed Robinson's website and check out his links to all the ops on Maui that have websites. It's a great place to read and do some research on what many of your options are.
We stay in Kahana or Kaanapali when we're there (we own a timeshare), and typically dive with Lahaina Divers in Lahaina, or go down to Ed Robinsons and/or Mike Severns when we want to dive out of Kehei. Accessing Molokini is better out of Kehei, but going to Lanai is much better out of Lahaina.