Oaxaca is another Mexican colonial town, but has plenty to do with its day trips in and around the city. In a nutshell, we went around Parque Juraz, which had loads of interesting 'Day of the Dead' displays and shrines; down the Alcala, which had the usual array of arty cafes and galleries; around the Zocalo, which is surrounded by elegant buildings and churches. We practically went to every church in central Oaxaca, including Iglesias de La Campania, San Juan de Dios and Santo Domingo. The latter church has 3-D relief images near the entrance which are particularly impressive. We also hired an unofficial guide (they work for tips) at the entrance and his 15 minute speech was worth the 50 pesos (£2.50). Basicilia de la Soledad, Templo de San Felipe Neri and the Catedral also make pretty pictures. It might be the time of year, but Oaxaca is a fascinating place with lots of action aka a mini Mexico City. We also noticed for the first time quite a few foreigners.
Later on we mooched around the massive Mercado Juarez, which was manic. I tasted the grasshoppers, which were surprisingly alright (similar to Scorpian, but sprinkled with the Mexican spice for the after-kick); Gwyn opted for the famous chocolate mole (in his own words "mole was a bad choice").
We got a few tour guide leaflets, so we could steal their itineraries and do them ourselves, but if you are travelling independently and/or don't have a 4x4 vehicle, then I'd go for a tour, as they're cheap as chips! At night we went to the recommended Guelaguetza Show. Essentially it's split into 12 parts (representing different villages) with colourful costumes, live music and folk dance. It was an alright show: the people were lovely, but it did get a bit repetitive (men stamping and the women swirling around with their skirts).
We went to bed at 11pm, only to woken at midnight with someone trying to break into our van. We'd not locked the back door from the outside (just the inside) so I think someone was just trying their luck. Mexico is more opportunist crime than how the media make it out to be, but it was still quite scary. They quickly scarped as soon as they heard our voices.