Well let's go. Valencia is not too big (about a million people), but all nice places to see are in a not too wide area, so you'll not do a long walking suppose. A must is the old part of the town, specially "El barrio del Carmen". There is all the best venues to take a beer or a coffee, many restaurants (expensive and cheap, but more of the cheaps) nice terraces, fashion shops. It's like a little London Soho, but more hippysh. In the night the place is full of quite different venues. Cafe Bolser??a and Fox Congo for chicks and commercial music. Club 47 for good electronica. Jimmy Glass too take a solo whiskey and listening to jazz in a quiet place. The are many many places, but all pubs (no discos in that area). Search for a good vinyl shop that is called 'Discos Mardigras!'. Not the best digging spot in the world but they have many original LPs of soul, disco, jazz funk and basically. Prices are very nice and items in fantastic condition. I've purchased there originals of American Gypsy, Leo's Sunshipp or 100% Pure Poison. Also have reggae, hip-shop, brazilian stuff and memorabilia.
That guy, Disco_che, has done a masterclass of spanish food so, keep on eating in that style. Near to El Barrio del Carmen is 'Plaza de la Reina' (a must also). 'Colon' is the main street, that kind of street with H&Ms;, Zaras and Starbucks (to do shopping).
Try to go to 'El R??o' and 'Los Viveros', the greenest part of the city to have a picnic. A Must is also 'Ciudad de las Ciencias', the most modern buildings in the city, now the icon. It has a great aquarium, planetarium and things like that. Repeat, a MUST.
If you have time, also go to 'Barrio Ruzafa', it's like 'El Carmen' but smaller. The same vibe, nice people and pubs.
If you wanna go out in the night, places:
MYA-Umbracle: Posh big disco in the city, very smart place, nice girls, big boobs but shitty music. The Venue is beautiful, it's inside 'Ciudad de las Ciencias' and has an open-air part. Audience is around 25-40 years old.
Miniclub: Small underground club. Best musical spot (electronica-dance, mainly good house and deep). Uses to bring some good DJs like Chez Damier, Rolando and Prince Thomas. Regular guests are Daniel Kyo and NAcho Marco. DON'T GO on a thursday. Go on friday or saturday. Audience is around 20-30.
La3: It's a kind of faker Ed Banger disco. Indie Dance mainly. Audience is around 18-25.
Sala el Loco: Quiet place, also have live music on nights. Usually funk things.
I recommend you not spend too much in food, I mean, you will have a very good lunch time with not enough money. Tapas are the highlights. If you could dig for a paella, try to do it on a beach restaurant, where are the best typical places (maybe 30 or 35 euros each one).
Oh, and for hostels...never go to the ones that are in the 'Calle Bail??n' area, which are near to the train station, because these buildings are full of prostitution. I you need anything more, send me a private.
Have a good time!
PD: Oh, and try to take a fresh 'Horchata', typical drinking. Not alcohol, it's like milk but it's delicious. My english is not as good as I would give you a good description.