Fondest memory: The central city square where it all happens. The square consists of a little park with lots of benches and lovely colonial buildings with shops and restaurants on the four sides. Just sit down and watch daily life passing by!
Hang out in the central park and just watch the people. The park is full of vendors, locals, daytrippers from Guatamala city and foreigners on weekends.
Fondest memory: Fooling around with the vendors. Bargaining is expected, so have fun with it. I would get the price down low and then pay a little extra to take some pictures, or if they wouldn't come down enough, I'd tell them I'd buy the item if they'd let me take some pictures.