Depends what you want really. I went to a town called Sorrento in 2004 and it was great. It's fairly touristy but you still get the feeling of the Italian lifestyle imo. You're not far from Vesuvio and the ruins either (a coach ride anyway). We also went to the island of Capri which was absolutely fantastic. I'd stay there if i were you, but i expect its crazy-expensive!
EDIT: Sorrento is on the Amalfi Coast and we also took a local bus to Positano (sp?) which was great. A small town on steep coast, hardly any tourists and a real Italian feel about it. What i'm trying to say is that Sorrento was a great place to base our visit becaus there was so much to see around it
Over easter me and the family went to Venice for a new nights, flew to Rome for a few nights then to Sorrento on the train. Was a nice mix of sight seeing and cultural expirence with Venice and Rome where as Sorrento was a very relaxing place with great scenery + you can take a day trip to pompey e.t.c.
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