We spent one full day in the capital, spending two nights at Hotel Palacio (and one additional night upon our return to the city before leaving the country), which was right in the Zona Colonial and around the corner from El Conde and a short walk from the Catedral Primada de America. We only had time for a walking tour of the Zona Colonial. For sights, if you are short on time as we were and you love history as we do, I would recommend the Cathedral and the Museo Alcazar de Colon (Columbus' son's palace). We also spent quite a bit of time at the Larimar Museum and gift shop, which may not be the cheapest place to get larimar and amber but at least we knew it was authentic, and they had a wide selection of settings. The best rum prices we found at a grocery store in the capital right on the corner down from our hotel. The Hotel Palacio was beautiful: clean, comfortable and gushing with history, and the staff was friendly. Lonelyplanet classifies it as top-end; also, lonelyplanet says there is a hot tub and exercise area on the roof but that is not so: those ammenities will be on the addition they are building, not the current structure. A buffet-style breakfast is offered but not included (I think it was about $7/person); it was delicious.
Early on the morning after our last night there (around 5 a.m.) we didn't have hot water but I was prepared for these little inconveniences and they didn't bother me. A very nice moderately-priced restaurant, Meson D'Bari, is right around the corner and we had dinner there twice.