The city of Otavalo itself is nice but not breathtaking, but the Saturday market makes this small town a definite stop for most tourists visiting Ecuador. The famous market is apparently one of the biggest in South America, with locals selling everything from cows and pigs to tourist-targeted weavings and crafts. I did a lot of shopping for Christmas presents when I was there and I managed to buy a lot of great stuff (blankets, scarves, hats, gloves, wall hangings) for next to nothing. You can get most of the same kinds of crafts in Quito for about the same prices, but the selection is far better in Otavalo.

Great place to check out just north of Quito. It's like the biggest crafts market in Eucuador. Very vibrant, lots of textiles and native garments. Everything is super cheap and just about anything else you might see elsewhere in the country you can get there for less.