The best way to start your stay in Venice is with a trip down the canal. One of the best and most inexpensive ways to do this is on vaporetto #1. Catch the vaporetto outside the train station or car park, and ride slowly down the canal, soaking in the city. Vaporetto #1 is best - it's the "local" boat, Vaporetto #82 is the express boat and is too quick for a good overview. The ride has the fewest crowds early in the morning. Try to grab a front seat, or stand near the front and try to grab a spot when one opens up.
Before you get on the boat, take a look at the bridge spanning the canal by the train station. This is the first (geographically, not chronologically) of only 3 bridges which span the Grand Canal. The train station itself is one of the only modern buildings in town, built in 1954.
Along the way, you'll see the Ca d'Oro - the "House of Gold" with the frilly-edged roof (which was once gilded - hence the House of Gold). This palace is considered the most elegant of the Venetian Gothic palaces.
The Rialto Bridge is second bridge crossing the Grand Canal, and the third bridge to stand in this spot - the first two could open to let ships through. However in 1592 the Grand Canal was closed to shipping and the existing Rialto Bridge was built, lined with shops. The bridge was quite an engineering feat in its day - it spans 42 meters and has a foundation stretching 200 meters on each side of the canal.
While you cruise along, notice the traffic signs along the canal. Venice's main "street" is often crowded with traffic - taxis, police boats, garbage boats, post office boats, even brown-and-white UPS boats. And of course there are the black gondolas - the symbol of Venice. If you glance at your driver, you may see him curse the gondoliers for getting in his way. Speaking of drivers, how are those dockings going - smooth as glass, right?
Venice is a city of palaces, the most lavish of which front the canal. However, the rising water level (due to the sinking of the city) is slowly overtaking these buildings. Many of these buildings have first floors that sit unused, and moss covers much of the bottoms of the buildings. Also, notice how many of the steps down to the canal now seem to decend quite a ways into the canal itself.
The Accademia bridge is the third and final bridge across to span the Grand Canal on your trip to Piazza San Marco. The bridge was put up as a temporary fix in 1932, but the locals liked it, so it stayed. Beyond the bridge on the right is the Salute Church, built as thanks to God when the devestating plague of 1630 passed.
Before you get off at San Marco (the San Zaccaria stop), look out across the lagoon at the Chiesa di San Giorgio Maggiore, the church that seem to float on the water. To the right is the island of Guidecca.