What you want to do most in Oaxaca is shop.
Oaxaca, the least expensive city we encountered on our 34 day drive through Mexico, is the world capital of bargain shopping. The stores are almost all contained in old, flat, featureless buildings along narrow streets. Exception: a large area around the museum and Dominican Church is blocked off to only foot traffic. In that area in particular you can expect to see the most amazing variety of original art for sale. The stores themselves are a strange mix indeed. You have to look inside most to find out what they are selling. Signs are rare. Whatever you decide to buy, be sure to haggle. The merchants we encountered expected and seemed to enjoy it. The Mt. Albán gold treasures are on display in the museum. Personally, I'd never known such dazzling treasures had been found in the ruins of Mexico.
Be sure to stroll the Zócalo, noteworthy for huge clusters of plastic balloons and helium filled plastic toys. Oaxaca's architecture is often heroic, but has been allowed to run down, which adds a certain charm to the overall experience. Except for the motorized traffic you could easily imagine yourself caught in a time warp, mysteriously whisked back to the 16th century.