Although I live in Virginia, I have many relatives all over Delaware and know the state well. It's definitely underrated. And no sales tax! If it says "$1.99" on the can, it's REALLY a dollar ninety-nine!
I would move to Delaware in a minute if I could find a job there. Some drawbacks (the unrestricted growth spurt of Sussex County, the southernmost county, is the biggest--Sussex County was rated recently as one of the fastest growing counties in the country). Here's a rundown of the population centers/resort areas of the state. I've been to them all and have spent lots of time there since the mid '70s.
The beaches: Fenwick Island, Bethany Beach, Dewey Beach, Rehoboth Beach, Lewes.
Fenwick Island--probably the most charming of the towns, but it runs right into Ocean City, MD, so it's turned into an extension of that popular resort town. But get off the main highway in Fenwick Island, and drive by the canals, and you will see some real charm. Some modestly priced motels (on the ocean side) make this an excellent summer choice.
Bethany Beach--wow, this town has changed since its "dry days" (which meant no booze in the restaurants--right up to the early '80s!) It's now what Rehoboth Beach was in the '60s and '70s--smaller and more charming, but the main drag can get congested in the summer. Still a good choice for families.
Dewey Beach--if Bethany Beach is the "G-rated" (or maybe PG-rated) destination of Delaware, Dewey Beach must be the R or even X-rated destination. It's a huge "meet market" (or "meat market") during the summer. Think drunken 20-somethings staggering down the main highway at all hours of the day. The town has gained a reputation as being "party central" for the mid Atlantic--even Sandra Bullock has been spotted at Bottle & Cork and Rusty Rudder, the two most famous restaurants/bars (Hootie & the Blowfish performed many times in this town before breaking out in the mid '90s, and the Rolling Stones were even evaluating a "special 'warm up' gig" at Rusty Rudder last year!) So for its noise and excess, Dewey does have its merits.
Rehoboth Beach--This has turned into the "San Francisco of the Mid Atlantic," thanks to a high gay population and art scene. Heck it even has a Film Festival every year. There are still some pockets of family entertainment to be found here. (My church had its yearly "youth retreats" here in the '80s). Just beware of "Poodle Beach" (those familiar with Delaware's ocean resorts will know this term).
Lewes--The oldest town in the state, bumped up against Delaware Bay (ok, it's not on the ocean). But for fishing and bed and breakfast fans, this is the place to go. Some charming shops and good pubs and restaurants to be found here.
Other towns in Delaware worth mentioning: Dover--the capital and a very quaint one at that. Wonderful old houses and Irish pubs line the downtown area.
Wilmington--the largest city (nearly 100,000) and with a vibrant downtown area and waterfront that, like other DelMarVa counterparts Cambridge, MD and Norfolk, VA, is going through a restoration. There are some sketchy areas of Wilmington so be careful! But the downtown area has some amenities that must've spilled over from nearby Philly and Baltimore (excellent restaurants and hotels, for starters).
