I have been to Oaxaca City on three different occasions and always enjoy this Mexican colonial city. The city is the capital of the state of Oaxaca. Make sure to add these to your list:
Plaza del Armas or Zocalo: Enjoy this wonderful central square of the city from a park bench or from one of the many sidewalk cafes. The restored buildings are very attractive.
Mercado Juarez: I always enjoy walking through this large covered market one block south and one block west of the Zocalo. Vendors not only sell food and produce but clothes and other household items. The handicraft portion of the market is worthwhile, as is the Mercado de Artesanias or Artisans Market a few blocks away. Across from the Mercado is a Mayordomo Chocolate store. You can buy mole negro and chocolate to take home.
Andador de Macedonio Alcala: Just north of the Zocalo, I always enjoy this pedestrian mall with great galleries and shops. I like Le Mano Magico at Calle Macedonio Alcalá 203 and Galleria Indigo at Allende and Alcala across from Santo Domingo church.
Church of Santo Domingo: This is one of the most beautiful churches in Latin America. The gold altar is gorgeous.
Museo de Arte Contemporaneo: I have not seen this museum, but friends highly recommend it.
Mitla: I really enjoyed visiting the ruins of Mitla, 30 miles from town. It is an important ceremonial site. I really like the designs of the stone fretwork which represent a fusion of Mixtec and Zapotec motifs. They look like they were heavily influenced by the Greeks. These motifs are also found in the artwork produced today in the surrounding villages. Mitla was just named an UNESCO World Heritage Site.
Monte Alban: Monte Alban was the religious, political and commercial center of the Zapotec culture for more than 1,200 years. On the outskirts of town, this is a major archaeological site on a high plateau with the Grassy Great Plaza, ball court, building of the dancers and a maze of temples and tombs that you can visit.
Semana Santa: This is one of the best times to visit Oaxaca. The processions are amazing and happen all week. On Palm Sunday you can buy wonderful woven crosses in front of the churches. On Jueves Santo or Holy Thursday try to visit seven churches in the evening along with the locals. There are re-inactments of the last supper and Jesus washing the feet of his disciples. Definitely don’t miss the Procession de Silencio or Procession of Silence late in the afternoon of Good Friday or Viernes Santo.
Day of the Dead: Oaxaca is one of the best places to witness Day of the Dead in Mexico on November first and second. Altars are set up in the homes and markets with food and drink, incense and flowers to honor and receive dead souls which return to earth once a year. Do not miss going to the cemeteries the night of the first where the graves are decorated with marigold flowers, candles and food. Families keep an all-night vigil next to the graves of their loved ones. This is a magical moment and should not be missed!
You can rent a car, but I like hiring a driver particularly to drive to the outlying craft villages and Mitla. It is good to have the extra hands to carry all that you purchase and get it to the shipping store. I have used Juan Manuel Jimenez Lopez twice in the past at firstname.lastname@example.org. Tel 51 3 44 34. Make sure you mention us.