Canal Canal Canal:
I highly recommend the overpriced partial canal transit. Sure, it is overpriced, but the two transit operators know they can charge a lot and still fill their boats. I've done the transit each time I've visited since 1996 -- and my last one was two weeks ago!!!! -- and will do it again next time.
There's nothing like watching the huge doors swing close and then watching the walls of the lock rise above you, just inches from the side of the boat.
Just cross off a day for the partial transit. We had to wait for two smallish cargo ships to enter our lock so we didn't get home until 3:30, I think. It's very unpredictable.
Handicrafts:
My favorite is a mostly Kuna Indian handicrafts market up the main street from the old YMCA market. (Bunch of stuff from there sitting on my dining room table right now.) There's also an extensive market next to Panama Viejo that I've also visited, but not this time because of a hungry kid.
Casco Viejo:
I would spend a good portion of one day here (visit canal museum, Golden Altar, Plaza Francia), including a bargain gourmet lunch ($8.50) at Café René. See if you can get a tour of the Presidential Palace. On Thursdays, I think.