Bali is interesting - I wasn't a fan at first, but once you get over the traffic and the touts it's quite a nice spot. It's cheap to eat out, so when we were there we ate out most nights.

We decided to stay at in Seminyak which is close to the action but isn't run to the ground with bogan aussies like Kuta. Theres some good boutique shops around Seminyak and overall we really like the area. Avoid Denpasar and Kuta. I've been told that Nusa Dua is nice if you want to escape the crowds and do nothing, but it's a haul to get anywhere to do shopping etc. And you dont want to have to travel far in the Bali traffic! lol

We rented a 3 bedroom villa (Villa Martine) and it worked out to be quite a good deal.

I wrote a review of it on my blog which can be found here.

Most people I know like to get private villas due to the cost savings and the extra room and privacy you get.