I spent a long week-end there a few years ago: stayed at the Hotel Exelsior just outside the city walls. At the time, it was somewhat 'faded glory' but still great. It's had a major refurb since I believe.
I would definitely recommend one of those hotels rather than the much-vaunted city centre ones during fine weather (if going in winter, city centre better option).
It's really very beautiful -- walking along the city walls is a unique experience. And the food -- especially seafood is really delicious and depending on where you have it -- from v. affordable to rather expensive.
Enjoy!
tb