I just came back from there - great food, beaches, clear water with tons of watersport options, interior with nice villages, and some of the best hotels in Italy (but very expensive). Shopping and people watching (sheiks and celebs) in porto cervo is also excellent. Capri is overrun by day-trippers and as far as I know a bit of a zoo and completely over-developed. There was an article in the IHT on it last week. I must confess my knowledge on Capri is all second-hand as I have always managed to avoid it.