A couple of days ago we came back home from a 5 nights stay in Istanbul. The trip had both nice and not so nice moments. Let's start with the bad ones, mainly so that other tourists can avoid the (unusually refined) traps we went into, and also to end in a positive way.
First and most important advice I would give is, if you go by taxi, it is NOT enough to check that the driver uses/switches on the taxameter. We had a perfectly honest taxi driver from the airport to Tünel who charged 50-51 TL something (the correct sum) and was very helpful despite (or because?) not speaking a word other than Turkish. He even bowed and thanked me when I just tipped him a few TL.
On the way back (from exactly the same spot and actually a bit shorter distance as it was a one way street, this time in the right direction), however...the taxameter showed 2,95 TL just when we drove off and I relaxed and thought I shouldn't be so suspicious. We had a fun chat with the driver who spoke a bit english and joked a lot. Arriving at the airport, I leant forward, still happy, and just froze when I saw the taxameter - 108,50 TL!! "What!? I don't even have that much lira left!" were the first words I said, and the taxi driver immediately suggested that my girlfriend step in back into the taxi and we go to an ATM. I started getting really angry and told him I know the price could never be more than 60 TL. He got very aggressive and we more or less started haggling loudly about the price, I finally threw 70 TL at him and slammed the door.
The second most important advice I would give is, when you dine in a touristy area, make a small note of what you order for which price. Decline anything you haven't ordered immediately (unless you do want to pay for it of course), like bread, olives, or dessert. This is probably (my guess) OK to accept in "normal" parts of town, but if you're in touristy areas, you are going to pay the price, and then some. Our bills were "spiced", but we didn't really realize it until afterwards.
Or shortly expressed, stay out of tourist areas altogether when it comes to dining...
The third and very general advice I would give is: Realize that Istanbul is a world metropolis with accomodation prices to go with it - we paid only 50 euro per night, but man what a dump it was! It looked good on pictures and even had a few good reviews (probably from the owner's friends..). We had booked a room with a terrace, arrived very late and were kindly asked if we could maybe instead consider staying in the bottom floor, just until tomorrow...we were disappointed but said "no problem". Next day in the afternoon I called about the room change, and was informed he had said "tomorrow" and that this was still just "today" - we had arrived at 1 AM in the morning...
So, another night on the ground floor without terrace in a dark alley where almost no daylight came through. By the way, in the evening at 10.30 PM someone dropped a cigarette butt from the terrace we had booked, when we were standing outside the building, nice to see it was used by someone at least.
After the two nights it was finally "tomorrow" and we got our terrace for the remaining three nights.
Anyway, if you want to stay "decent and central", I suggest you budget as if it was a Western European city, ie *at least* 80 euros per night.
Ok, so, some positive things:
The area we stayed in, Tünel, was very interesting, and actually more "alternative" than anything here in Berlin, which is otherwise known for such culture! The plaza around the Galata Tower offered a great view for people watching, it seemed everyone was there, cats, dogs, homeless, noveau riche, tourists, hippies, devoted mosque prayers etc.
It was interesting how even the inner city changed character quickly - walking up north towards Taksim it looked like any European city, with the in my opinion rather dull Istiklal caddessi being the artery between Tünel and Taksim. The tram between them is so slow it's quicker to walk. A metro line is being built southwards from Shishane and will mean a major improvement for tourists getting around the inner city.
South from the Galata Tower, it's steep downhill to the much more oriental area around the Galata bridge with many restaurants (do not eat "under" the bridge, apparent tourist traps and yet we went into one of them). From here you can either continue walking over the bridge or taking the tram all the way up to Sultanahmet with Hagia Sofia and other sights. Buy one of those cards, Istanbulkart, because it's sometimes enerving and time-consuming trying to find coins or small bills (almost) every time you transfer.
One area in Sultanahmet I liked, was the surroundings of the Topkapi palace, lots of greenery and good views across the water to the Asian side. Also a beautiful tiny cobblestoned street running cross between Hagia Sophia and Topkapi Palace, a hotel there would have been nice!
We later did the full Bosphorus cruise, departing from the southeast corner of Galata Bridge at 10.30 AM. It was nice, but in retrospective I would go for an evening tour instead, as Istanbul definitely looks much better in the night!
My tip for the full Bosphorus cruise if you still want to do that, would be to pack sandwiches for lunch as the restaurants in the village where you will spend a few hours are obvious tourist traps -we fell into one...can you imagine ;). Instead, eat your sandwiches when you have reached the ruins half of all tourists go to anyway, and where you more importantly have a grand view of the Black Sea. After that, walk down again to the highest located restaurant and have a few drinks there (not the food).
An area tha looked very nice but we found no time to explore was Besiktas, along the Bosphorus - the waterfront bars actually looked far more inviting. In fact I think already Kabatas is far more relaxed than around the Galata bridge.
We also went to Cevahir shopping mall on a day with rain, it was predictably huge, but very comfortable to reach with direct access to metro station Sisli, second station north of Taksim. Peoplewatching was very interesting here as well, as the mall is an obvious hangout for the middle-to-upper class. Very Western in character. Migros is a well-sorted supermarket on the underground floor. Remember imported wine is insanely expensive in Turkey, so test local brands or better yet, drink local beer instead. Personally I think the internationally sold Efes is perfectly ok, better than certain international brands from the Netherlands or Denmark at least ;)
Ok, those were a few impressions from Istanbul, both good and bad.
Summary: Don't be greedy - both prices and quality are on Western European level, which means if you find a bargain, it most likely is a rip-off instead.
Do make use of public transport and your own feet, buy an Istanbulkart.