I was fortunate enough this summer to visit Istanbul (2010 European Capital of Culture) for work. Work was part of the 5th World Youth Congress. Brouhaha whom I wrk for were there to do music and dance workshop and a Carnival parade.
We stayed at the Butik Star on Siraselviler Cd in the heart of Taksim. It's a good location for food and drinks etc. Also close to Taksim funicular which takes you to Kabatas that is on the line to the tourist sites like the Hagia Sofia, Sultanahmet, Egyptian Spice bazaar, Grand bazaar Topkapi Palace and for the Bosphorus boat tours.
It a busy city and a sanctuary like the cafes by the Spice bazaar opposite the new mosque 'yeni cammi' is peaceful around 5-7pm. They have shisha pipes there too. Turkish tea n coffee is a must. Not far from here is Hamid restaurant on Tahmis Cd. You could eat a good meal for 25-30ytl inclus. Drink. Alcohol will be more. But it's not a good place for vegetarians.
Under the Galata bridge there is cafes, restaurants and bars that are a favourite haunt of tourist.
We preferred to try one of the restaurants of Istiklal, there were many little streets and lots of bars and restaurants. Try a different one each night.Cake shops look great but in the heat I could not stomach dessert except Turkish ice cream, dundurma
Look up and around at the buildings as the architecture is eclectic but wonderful. Take a trip on the Bosphorus if have time it is best to move further away from the busy area and you may get a better price. We went all the way up to the big bridge that crosses frm Europe to Asia and the Palaces and some interesting exclusive night clubs were simply astounding.
Shopping when at the Grand Bazaar outside is probably cheaper and if u have time wonder around the trade shops frm buckles to guns u name it they have it. Haggle haggle haggle is the name of the game. I found the Spice bazaar cheaper for trinkets and Turkhis ceramic/ glass souvenirs. If u are buying back Turkish delight from here look for the ones made with honey. They cost a bit more but taste better.
Depends on what u like but a trip to Istanbul modern is a must the view of the Bosphorus and art is lovely. The cafe is pricy but the lazy relaxing coffees on the terrace is worth it. Around the modern there are some interesting building too.
Finally take an evening walk down Istiklal and try the corn on the cob but not the mussels. Enjoy the street sellers and soak up the atmosphere watch the guys selling the little helicopters soar up high. End the evening with some drinks on the terrace at 'My House' bar n restaurant on Siraselviler Cd the views of the Bosphorus are stunning.