If you heard the French sentence first, it is correct that "ils te regardent" and "il te regarde" are acceptable because the pronounciation is the same.
you use "tu" when the pronoun is subject. When it has a function of object, you use "te" (like I and me in English)
Te is the direct object, right? Is there an easy rule for knowing when that the Dir. Obj. comes before the verb instead of Subj. verb. Dir Obj.?