Luggage and bags:
IF you are a woman travelling, do not bring a huge purse. Especially if you are not skiddish and plan to ride the local bus or plan to do much walking. I had a medium size purse (enough for say 3 pocket phrase books, my wallet, digital camera, cell phone, and a small make-up bag) and it was totally in the way. Bring something small that you can keep close to your body for convenience. I didn't need more than my money, ID, a phrase book and my camera.
Clothing/Shoes/Weather Gear: Bring comfortable shoes! Walking is a must, and I thought my mules I wear to run around in back home would be comfortable. The were convenient at the airport, but the insoles slid in on me.
Toiletries and Medical Supplies: You can buy almost anything at the huge market downtown, but I recommend chapstick and sunscreen the most. Oh yeah - bring a plastic shopping bag or a small office trash bag or two, if you are staying in a youth hostel or other place with a private bathroom that may not involve room service. You cannot flush items like toilet paper, tampons, tampon tubes, etc.; those items are discarded in a garbage can next to the toilet for later disposal.
Photo Equipment: If you're out and about town, a small digital camera with a wrist strap will do well.
Miscellaneous: DO NOT DRINK THE WATER FROM THE TAP. I came home with a raging infection of Giardia. It won't hit you until about a week and a half to two weeks after you come home. BUY BOTTLED WATER.
Toiletries and Medical Supplies: I learned to my great dismay and pain that the sun in Cuernavaca can burn your skin in 2 hours as effectively as it does in Cancun. Don't forget to pack some sunblock and use it - or get "lobsterized" :)