I second ichtiet's recommendations. Mexico City is very interesting.
I like to add "Zona Rosa", where you find some nice restaurants.
For hotels, try the area near, at Zona Rosa or Polanco .. Zona Rosa, Av. Libertade is a little more central.
I liked this restaurant a lot:
San Angel, Mexico City
Diego Rivera 50
San Angel Inn
Mexico 01060, D.F.
Tel: (525) 550 61 69
Fax: (525) 550 61 78
Part of a "Carmelita" monastery built in 1692 it was turned into our San Angel store in 1996. Known as the "Hacienda Goicoechea" it belonged to the Spanish royalty. At the time, all the property was a quiet and relaxing place for its owners and distinguished visitors.
Located at the southern part of Mexico City....