Traveling from Salem to Yercaud in a taxi costs around Rs.900 for a non AC Ambassador. If you are traveling in the morning, it will be very pleasant and A/C is not required.
The ride takes about 45 minutes to an hour. If you do not want spend the entire day sightseeing, and find the taxi rates very costly, you can hire autos for sightseeing. Its a very small city, and autos are more cheap. You can hire an auto for 3 hours for about Rs.400 (which taxis will charge around 900Rs for the same 3 hours) and see all the major spots which require travel, such as Rose Garden, Ladies' Seat - Gent's Seat - Childrens' seat (all in the same place), and Pagoda Point. The taxi and auto drivers will give the impression that they are all far away, but all the "seats" are pretty much together. So you should not be duped! By breaking your travel into small chunks, you wont be too exhausted, and can retire to the room for lunch and some rest. You can buy some local produce such as fresh coffee, aromatics, cardamom etc. also.
Small village set around a lake. The whole town grew out of a British hill station, and still has some semblance of a European lay out.