What to buy:
Best place to go shopping for pottery, sculptures, gifts, etc. I did most of my shopping from here and bought amazing stuff for a decent price such as a sculpture, masks, vases, silver, pottery and hand made crafts galore.
What to pay: Please dont' haggle with the local street vendors because they need the money. Their prices are reasonable 10-150 pesos for most items. The stores are more expensive but they buy the stuff from the locals.
The Taxco region is famous for their intricate masks. They have small ones, the better for packing, or, if you're on your way home, huge masks. The big ones can go for quite a bit (from $50-100 for a high quality one). A lot of artists display their work in shops with a salesperson, and the price is set beforehand. However, the artists tend to show up a lot at the shops. So the best way to do things is to catch the artist so you can bargain with him, since the salesperson isn't allowed to bargain on the higher priced items. Ask for the artist: "?Quien es el artista?"
What to buy:
If you are in Taxco, you will have to buy some silver for your girl/boyfriend/mom/long lost auntie. This is one of the premier places to buy silver in the world. You won't get super cheap deals (unless it's fake silver), but if you act like you know what you're doing, you will get fair prices. Jewelry is sold mainly based on the weight of the silver, but the better the artisanship, the higher the price will go. So if you're unsure about the price they quote you, ask them to weigh the item, and multiple by the current price per ounce of silver. And it never hurts to bargain a bit either.
If you're in Taxco for more than one day, I would suggest just looking around the first day, because there are so many silver shops that it can be overwhelming. Then you can find the places with more unique items and scope them out on the second day. All silver by law must have the official stamp on it, otherwise you know it's a fake. I can't remember what the official stamp is exactly, but it should be pretty easy to figure out.
I highly recommend that you get off the beaten path and just walk around the side streets.
I found that quite a few people where selling silver out of their homes at a much better price than the stores on the main drag.
The silver there is so cheap, plan on spending around $3 for a silver ring.
No particular shop, as the silver shops are everywhere,although there is a 'reconstructed silver mine' which is nothing more than a lure to attract tourists, but is at least co-operatively run - and they have reasonable things at reasonable prices.
What to buy: Silver is the order of the day in Taxco and where to buy it is dependent on your taste - fiiligree, traditional, set with stones, simple, chunky, contemporary. Jewelry dominates, but there are some shopd that sell other silver objects - from trays, vases etc. These are superbly crafted and good value, but are not cheap. And everywhere you go, there'll be aview of the cathedral!
What to pay: Varies