Some friends and I wanted to try somewhere different over Christmas vacation, so we headed to Panama to see what was there. We went without a lot of planning or knowledge of what there was to do, but ended up with a great trip.
We didn't spend a ton of time in the capital city, but recommend checking out Old Town....a nice change from the modernity of Panama City and has some hip restaurants to check out. For me, the Panama Canal wasn't as interesting as I expected, but is probably a must anyhow.
We found two gems that I would highly recommend - Sapibenega - a private island with a few eco friendly huts on it - our room was made of bamboo and it felt so refreshing to have the ocean air come through the slats while sleeping. Food was fresh and delicious, seafood based. You can go on a guided hike and check out the indigineous tribe on the next island.
Best is - Survivor Panama used this island as one of their "rewards". You can reach the island by a jumper flight. Hammocks abound....bring a book. A few hours drive from Panama City is this family run spa we found.....basic (food and accommodations) by US standards, the owners are super friendly and speak Italian/English. You cannot beat the price for the amount of spa treatments you get here. We did the overnight package. Highly recommend!