Concierge.com's insider take:
High on a mountain with views over the Mediterranean Sea and Mount Etna, Taormina was founded by Greeks in 395 B.C. and quickly became a city-state of major importance. Its surviving theater, the second largest in Sicily after Siracusa's, is still intact today and one of the most dramatically situated ancient Greek theaters in existence. Every year in June, the Taormina International Film Festival takes place here, with movies shown on a giant screen inside the theater (www.taorminafilmfest.it/2007/).
Taormina has some of Sicily's best beaches, including the Lido Mazzarò—a favorite of Hollywood stars in the forties and fifties and still a hot spot today—and nearby Giardini-Naxos, where the beautiful Ionian waterfront is dotted with resort hotels and chic restaurants. Visitors wanting to get farther afield can drive northwest to the adjacent town of Milazzo, the jumping-off point for ferries to the Aeolian Islands. These volcanic islands—all home to extinct volcanoes, save Stromboli—are famous for their charming towns and villages, dramatic topography, and, in the case of Vulcano, therapeutic mud baths.