I was in Palermo for a few days last October. The weather was beautiful and I really enjoyed the city and surrounds. I was very lucky to be there while the annual Targa Florio rally was getting underway, and being able to watch the classic cars weaving their way through the Palermo thoroughfares.
I stayed in a very nice, reasonably priced 1-bedroom apartment in the centre of the city, which made all the sights and transport hubs quite walkable (at least for me, with only a backpack to haul around). For anyone who may be interested, this is the apartment, which I can thoroughly recommend. Eleonora, the host, was absolutely lovely.
Oh, and I forgot to mention, an easy half day trip from Palermo is the beautiful beach town of Mondello, which can be easily and inexpensively reached by public bus from Palermo. Google Maps has all the details.
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