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I spent Christmas out in Cape Town, with family who live out there. I've been before, I would happily go back again. Cape Town is an astoundingly beautiful city, with breathtaking natural surroundings - Table Mountain, the beaches at Camps Bay and Clifton, the coast down to Cape Point.
The natural beauty would be number one recommendation for sight-seeing in Cape Town. Table Mountain is well known and is the obvious attraction. There is a cable car up to the top, where you can have astounding views over the city and out to sea. There are also numerous walks and hikes on the mountain, for those who are adventurous (it is extremely important to follow recommended safety guidelines for these, partly due to weather and partly due to crime, see below). There are also incredible beaches near Cape Town, particularly at Clifton and Camps Bay. The water is cold and not great for swimming, because of this. In the warmer areas, there is a risk of shark attacks (one lady was eaten by a great white at Fishhoek whilst I was there). However, the beaches themselves are stunning, if a bit windy. Clifton and Camps Bay also have a great array of (safe) nightlife, restaurants and bars.
There is also a wealth of wildlife to be seen - penguins at Boulders Bay and Bettys Bay (both not far from Cape Town), seals at the seal island in Hout Bay, whales in season at Hermanus, and for the most adventurous shark diving! It is possible to combine a stay in Cape Town with a flight up to the Kruger national park to go on safari. However, for those like me who don't have the time or money for that, there are some private safari reserves within driving distance of Cape Town. I visited Aquila safari - where, if you're lucky, you can see lions, crocs, hippos, rhinos, wilderbeests, boks of different sorts, giraffes, zebras, leopard (if you're really really lucky), and many smaller creatures like meerkats, hyenas etc.
In terms of man-made attractions, Cape Town has plenty to offer. The V&A Waterfront centre is now the tourist heart of Cape Town, with shops, restaurants, entertainment (street dancers, theatre etc), historic sights such as the Clock Tower, and the gateway to Robben Island (the prison island were Nelson Mandela was held - itself worth a visit). There are also many tours relating to the (very disturbing and tragic) history of the country, such as the Walk to Freedom tour, District Six tour, and the township tours. District Six Museum is also definitely worth a look (District six was a multi-cultural area cleared during the apartheid regime).
Outside Cape Town, there are fantastic wine routes, with picturesque towns like Stellenbosch and Franschhoek. Great wine, great meals and all very cheap.
Now the downside - crime is a REAL problem. Fear of crime is rife, and my relatives drummed into me that it is not safe to walk anywhere except in very very particular areas like the Waterfront, Camps Bay. As it was, I suffered an attempted mugging near the Waterfront, and both myself and my companion suffered major credit card fraud (to the sum of about 5000 pounds between us) due to our cards being cloned. (Again, we think this happened in the Waterfront. Fortunately, the money has been refunded, but only after considerable expense to both of us, and time-consuming trips to the police). Whilst I was there, there was also a crime spree on Table Mountain of all places, with a number of tourists being stabbed.
The other major problem is that there is no real public transport, and it is not safe to walk generally. Thus, if you can't drive (I can't), it is impossible to get around unless you rely on lifts from friends or go on organised tours. This can be frustrating if you are used to your independence!
I would certainly recommend people go to Cape Town, but I would advise them to go to a nice hotel. Good hotels will provide safe transport and tours to all the appropriate tourist areas, and will look after you well. In that type of setting, you should be fine and not encounter problems. I would not advise people to go self-catering, unless they know what they are doing and have their own transport.
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