Do *all* the museums. They're much smaller than typical US museums and you can easily do 2 or even 3 in a day, if you're so inclined.
I recommend the canal taxi as a good way to get around for sightseeing. Amsterdam is also a great walking around city - you can cover a lot in 3-4 days. Also some interesting but touristy tours avaiable of the countryside (e.g. windmill tour).
As for food - best Indonesian food in Europe. More correctly, best Dutch Indonesian food. Must try the reistaffel (sp?). if you don't mind spicy.
Re hotel, I've been delighted with the Pulitzer, but it's been getting a little expensive lately.
Good luck and have fun!