We LOVED Santorini. After much thought, it might be my number one favorite place we've visited so far. We had perfect weather, never a cloud in the sky. Our hotel was fabulous, the view was great, the food was awesome, and we spent just the right amount of time there (really, we probably could've stayed longer!). Would recommend to any/all go to Santorini (but perhaps, without the kids).
Where to Stay: You MUST MUST MUST stay on the Caldera side of Santorini, in a hotel and room with a Caldera view. When we started looking, I was thinking beach side (because I hadn't done my research), which was dirt cheap. Alex, however, was set on Caldera side. And thank goodness he was because it was just gorgeous. Morning Noon and Night the Caldera is BEAUTIFUL.
I would NOT stay in Fira or Firastefani, for they are very crowded with tourists. We stayed in Imeroviglia, which was perfect- quiet, but with plenty to do and again, great views. Oia was really nice as well, but loaded with tourists in the city. Oia is DEFINITELY worth the day trip.
Hotels are a bit more expensive in Santorini - it is a major tourist spot, but they are worth it. If going in the summer, make sure your hotel has a pool (not big, just for a quick dip after sitting in the scorching sun.. even for 5 minutes!). Our hotel (Ilviosilema) was awesome. The staff was super friendly AND they upgraded us to a suite.. for FREE!! Couldn't have asked for a better spot. It also offered the perfect view, bottle of wine upon arrival, a pool with great chairs so you could spend all day soaking in the sun and taking in the Caldera, and a helpful staff! Would recommend it to any/all (and it was much cheaper than other places we were looking at).
Where to Eat: Anywhere off the beaten path. If you eat in one of the busy cities with all the tourists, it will be more expensive. But in the small villages or not on the main square, eating and drinking = SUPER cheap. I took lots of pictures of our food, so expect another post shortly!
What To Do: A boat cruise around the island (we did a sunset cruise which I HIGHLY recommend) which offers a meal and free drinks, renting a 4-wheeler to see the other little villages (easier to park than cars, trust me!), a walk around/street shopping in Oia, have a bottle of wine and watch the infamous Santorini Sunset, and relax!
What NOT To Do: Don't go out of your way to see the Red Beach, Kamari Beach, the Hot Springs, or anything on the other side of the island. If you have time to kill or the boat cruise goes there (ours did), that is one thing, but a separate trip is just not worth it.