I only spent one night at Palopo, time enough to take a break during two days' backpacking around Toraja country. Palopo is a medium sized town that sits on the coast and makes for a lovely stopover!
Personally, I think the best way to enjoy the Toraja country is to spend your time exploring the mountains, jungle and rice fields! I therefore recommend you visit Palopo towards the end of the day and stay the night.
The huge market is fun and the locals really welcoming (as with everywhere on the island). I remember being there during Ramadam and, on arrival, noticed that there were numerous mosques! Indeed, the town is home to the oldest mosque in the southern province of the country. A must-see!
You can also tour the Royal Cemetery, a fascinating visit for those of you interested in this little known island's history!