Even though there are Indian restaurants closer to town, Udipi is definitely worth a visit from time to time. South Indian is hard to come by and can be harder to do well. Udipi gets it right, which was a pleasant surprise.
As others have indicated, you don't go to Udipi for the service or decor. Be prepared to have to flag someone down to take your order (perhaps a couple times) till you get the right person.
The dosas and uttapam are delicious. I've enjoyed the various curries I've tried as well. And the coconut chutney that is served with the dosas is my favorite.
One my most recent visit, we came at a time when the restaurant was full and some larger groups than ours were waiting for a table longer, but our group of 3 only had to wait ~5 minutes. The food came pretty quickly after we ordered, everything was tasty and relatively well-priced, so overall I would recommend.