Evenly cut your pancetta into thin strips no more than 1/2′ in length (smaller is better). Add to a large sauce pan on medium low heat (2-3 on a scale of 10) with about 1 tablespoon of your olive oil. The idea here is to mostly render the pancetta in its own fat so you do not want to add more oil than necessary to prevent sticking. Stir as needed with a spoon.
Finely dice your shallot and add to the pan after the pancetta has been cooking for about 5 minutes. Stir the pan, coating the shallot in pancetta fat and olive oil. If you feel that the pan is too dry, add more oil.
Crush a clove of garlic gently with the side of your knife or palm of your hand, dice and add to the pan once the shallots have just begun to sweat. Mix the pan and let sit for a few minutes while the shallot and garlic cook.
After about 10 total minutes, add your tomatoes and sugar to the pan and stir. The sugar is necessary to temper the acidity of the tomatoes. Stir the pan occasionally throughout the next 10 minutes.
Shred the basil by hand and add it to your sauce. Sprinkle in some crushed black pepper and taste as you go. I usually use about a teaspoon.
Turn off the heat and allow the sauce to thicken. Stir in your other optional ingredients if desired. Finito! Serve over pasta or on pizza or store for later use.