Downtown Disney is mostly shopping with a few restaurants. It is connected to PI, which leads into The West Side. There is a seasonal ferry that goes between West Side and DTD if you want to skip PI all together. Otherwise, it's a short 7-10 min walk between the two.
Downtown Disney has mostly Disney related items, though some other things... The HUGE World of Disney is there, Home Store, Bath products store, etc. Earl of Sandwich is a new sandwich shop that is very near the fountains the kids can play in... there is also a Ghiradelli chocolate fountain, Fultons seafood, Rainforest, etc.
West Side has a movie theater, Disney Quest, other stores like a Guitar shop, cigar store, Hollywood memorablia, etc. plus Bongos Cuban Cafe, Wolfgang Pucks, etc.
The parking is usually ample AND free. Its a great way to get a taste of Disney without spending one of your park admissions. They are open late, as well, usually, so you can go later in the evening for dinner and shopping.
www.allearsnet.com will have the complete listing of restaurants down there and the menus =)