What Not to Miss in Oaxaca
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Oaxaca is a beautiful state - tied with two other states as the most mountaineous in Mexico. The city itself if surrounded by mountains and is at an altitude of 5,000 feet above sea level. If visiting Oaxaca, I would definetely go into the mountains - even ride the dirt roads if you want a full experience.
Visit the market! There are very interesting and cheap things to buy. Make sure you buy the black pottery (never in short supply there) - this pottery is made right in Oaxaca and is more expensive in the U.S. Also get colorful and buy some blankets, clothes, jewlery, rugs, etc. The stuff is cheap compared to the U.S. If you brought $100 with you to buy stuff, you would be covered for a good shopping experience.
Visit the pyramid ruins, old churches, and the Tree of Tule (2,000 + yrs old). There are gorgeous churches in the market area - don't miss them. The Tree of Tule is amazing - so old and so big that it takes 32 men to circle it. I heard there were pyramid ruins on the mountains, even though I was not able to see them myself.
Don't be afraid to try new food. The grasshoppers are not that bad and all the rest of the food is amazing.
Most importantly, tour the area (if you know of any natives, even better!). Drive by the villages in the mountains and take a walk in the good areas of Oaxaca. Never walk by yourself or at night or in a bad area! The city of Oaxaca is not the safest city in the world. By seeing where the people live, you will gain a whole new perspecitve on life.