pau is easier to spell
Good point. I'm quite tempted by Pau because I haven't been there before and apparently it has the best views of land ever (or something, I'm paraphrasing from wiki) but it's supposed to be gorgeous. I think in Grenoble I'd be sad about the lack of snow ...
Pau - take the foal to the observatory in Pic du Midi de Bigorre. Cable car rides (terrifying) and space stuff. Brilliant.
If you are going in the height of summer, I would give Grenoble a miss. It is quite an industrial city, and as it is sited in a natural bowl in the mountains all the air pollution doesn't escape. They even drop the speed limits so that cars reduce their emissions.
Cheaper accommodation in the summer if you stay in ski resort towns, I'd suggest La Cluzaz, easy access to Switzerland, Turin, and Annecy, the jewel of the French Alpine region...
I suspect Pau is a lot cheaper (and more interesting)