I went there for New Years' eve about 3 years ago and stayed for a few days - it's a great city. We rented an apartment just behind the museum in Pest, it was pretty basic but very cheap!
Like others have said, when looking for food / drink, look for the places where the locals are going. We found the touristy restaurants around the Castle area in Buda to be overpriced and the food quite average. There are plenty of restaurants to be found in Pest though and all the food we had there was excellent! I wish I could remember the names of any of them...
The public transport works realy wel too so yo can get around realy easily in the city - you buy tickets from news stands etc and the same tickets were valid for bus, subway or the metro trams. We never had to use the taxis once cos the trams run a sort of circular route right around the city and the cross the river too.
Lots of amazing buildings to see, if youre into sightseeing.
I can't wait to go back sometime.
