It is no secret that one of the primary draws to Amsterdam for foreign tourists is that many things that are illegal elsewhere are perfectly kosher here. Should you choose to indulge in many of the things Amsterdam has to offer there are a number of tips that can help keep you safe and having an enjoyable experience.
First of all with regards to smoking...marijuana is legal in Amsterdam. There are coffeeshops everywhere which are the venues where it can be purchased. Some of the larger hostels such as The Bulldog actually have a coffeeshop attached to the building. These places will all have a menu for you to choose from displaying the product's name, country of origin and price. Smoking is perfectly safe and acceptable here. You can smoke in bars and many people smoke on the street even though I think technically you are supposed to remain indoors. Although it may not be encouraged smoking outside will not get you in trouble. If you are not sure whether or not it is ok to smoke inside in a particular place it is perfectly acceptable to politely ask. I would not recommend trying to smoke in restaurants but bars and coffeeshops are fine.
One misconception we had about Amsterdam is that there would be bakeries everywhere. This was not the case and it actually took some effort on our part to even locate a spacecake. After some asking around we found from a number of people that the "real deal" was any product produced by The Muffin Man. He is a local baker that sells batches of his products to local coffeeshops although only a select few have them. We bought ours at The Grasshopper coffee shop. That day they had slices of cake in individually wrapped packages. We were aware of what we were getting into for the most part. Spacecakes here provide a CONSIDERABLY stronger punch than smoking or any brownies you made have had elsewhere. They take a couple of hours to kick in but when they do it almost gets to the point of borderline uncomfortable. I would seriously recommend eating half to 3/4 or a slice.
Mushrooms are also legal in Amsterdam and are sold all over the place. There will be signs on the street advertising them and most places offer a number of varieties. We were only in town for a night and never got around to trying them but as with the spacecake I would recommend starting with a relatively small amount and giving them time to kick in before eating too much at once and freaking out. Talk to the locals or whoever you buy them from for more substancial advice. Almost everyone speaks English....especially in the coffee shops.
Whether or not to go to a sex show is really a personal choice. There are dozens of them lining the main streets in the red light district. If you walk down the street late at night people will try and solicit you to go in every 50' down the street. A polite no thank you will do although it does get really redundant after a while. We opted to stay away mainly because of the price. They usually run about 20 or 30 euros and with our limited time and the lousy exchange rate we figured we could better spend our time.
The girls that line the windows of the red light district at night are definately an interesting sight. Make sure you don't take pictures. Be respectful and you will have no problems. There are dozens that are literally some of the most beautiful women I've ever seen in my life..... So many of these girls could be models or trophy wives and I have no idea how they haven't figured that out yet. On the other end of the spectrum there are your selection of girls that are absolutely unattractive. You will see girls of every ethnicity, SIZE, etc. Fittingly, the most attractive girls seem to be on the windows facing the main streets on the canal. We didn't partake in the services but it was really funny to watch customers poke their head out of the doors with a guilty look and try and slink of without anyone noticing them.
Amsterdam is an extremely safe city despite its reputation. We never once felt uncomfortable, threatened or in danger. Everyone is very respectful and good natured and there are so many tourists and locals around late into the night that you never get the feeling you are walking alone down a sketchy path. Enjoy yourself and remember to keep things in moderation until you know what the effects will be. Have fun!