I would not necessarily recommend a vacation in Cabo San Lucas if you're looking for that inexpensive Mexican vacation and local flavor. Cabo has become very US-oriented in its appeal, accommodations, activities, food, and prices. Dinner for two can usually run you at least $50, with tip, and the food and experience are not always worth it. Most of the attraction to Cabo San Lucas is the water area. The bay is beautiful, and so I'd recommend limiting your activities to jet skiing, parasailing, ATV rentals, etc. Do avoid the timeshare booths and solicitors at all possible costs. It's not really worth losing several hours of your time to hear a sales pitch, just to get small savings on renting ATVs, for example.
We rented a small car (big mistake), which turned out to be a vintage VW bug (go for something bigger) and was missing the tire jack, in case we had a flat tire. It did allow us to be more independent and roam the Baja area to see more than just San Lucas. Following the simple highway system around the cape allows you to enjoy the majestic mountain scenery and observe the changes in terrain from beach, cactus, desert, and mountain range. We took in their local zoo -- not what I expected either – which was more like a local family's collection of animals in small cages (including lions and tigers -- sad). Roads are very rough in many areas, and the hurricanes and flash floods make for several washed-out areas. Cabo San Jose was much more interesting and had a more local flavor with shops and dining. The traveler is highly advised to check out Cabo San Jose for a comparison.
There’s not much gay activity -- only one gay bar in Cabo San Lucas, but lots of action at the local straight bars that circle the marina area. It’s not a place for gays to relax and enjoy themselves, unless they're looking for someone on a one-time from their partners.
ATV rentals were a blast. They lead you to a far sand dune area north of the city and let you loose. Areas are fenced off to prevent you from actually going to the beach, but the steep terrain and mapped-out courses are very fun. Guides are always present to make sure no one gets hurt or goes unchecked.