Amsterdam attracts a very different type of tourist from other European cities. While there are many great museums, especially for fans of the Dutch masters or Van Gogh, most tourists in Amsterdam are there at least partly for the coffeeshops and the Red Light District. When it comes to a relaxing place to kick back with a beer (or something else), Amsterdam is top on my list. For a true look at the dark side, spend time in the Red Light District. If you are nervous about trekking the area on your own (you shouldn't be), you can even take organized tours (!) The areas around Leidseplein, Waterlooplein, and Westerkerk provide a much more laid-back place to find coffeeshops and pubs that the locals frequent.
As far as attractions, there are three that the visitor should absolutely not miss: the Rijksmuseum, the Anne Frank House, and the Dam. If you have more time, you should see the Artis Zoo, the Van Gogh museum and perhaps take a canal tour. There are also a few tourist attractions to skip: the Heineken Experience and the Sex Museum are a complete waste of time and money. Much of the joy of Amsterdam is not found in museums, old buildings or churches, but in simply getting out and walking around the city. Amsterdam is a very walkable city and whether you follow a tour or strike out on your own, you will find that the city itself is its own attraction.
Quick Tips:
Despite what many perceive as a seedy atmosphere, Amsterdam is not a dangerous city. While you should maintain a resonable amount of caution regarding your money (don't put your wallet in your backpocket, for example), you are in little danger of violent crime here. The police are quite friendly and speak English, should you have need of them.
Perhaps the most troubling aspect of an Amsterdam holiday is where to find accomodation. If you are willing to share a bath with others in the hotel, you can find a string of budget hotels along the Damrak and others in the Red Light District. Beware, however, that these locations can be quite noisy and sleep may not come early!
If you choose to indulge in soft drugs, use common sense. Do not buy from someone on the street and only smoke in approved areas (coffeeshops are the safest bet). The product sold in Amsterdam is significantly stronger than what most people find at home; feel free to enquire with the coffeeshop for a recommendation if you are not a pro. You'll find that taking it easy at first and not overdoing consumption will make for a much happier vacation.
Best Way To Get Around:
Walk! Amsterdam is very compact. From South to North or East to West, you can navigate central Amsterdam in about 30 minutes. When walking, be on the lookout for bicycles, as they very rarely yield to pedestrians. Listen for the rings of the bike bells to tell you that you are in danger! You can also rent a bicycle and travel like the locals. Just be sure that you stick to the bike lanes, as cars and trams have no mercy. To travel quickly, the tram and metro are very easy to use. Trams run everywhere, while the Metro primarily runs from Centraal Station down the East side of the city (Waterlooplein). Both are covered by the city's daypass which, at 5.50, is a bargain if you will be using a lot of public transport.
Do not rent a car!! Seriously. There is nowhere to park and there is no need for one in the city itself. Indeed, there is rarely even need for a taxi, which is good as the taxi drivers are notorious for over-charging tourists.