Personally, I've been to Vegas 5 times, and to be honest, if you stay at one of the better resorts, you can't go wrong. I have found though, that the best places are in the centre of the strip. I loved the location of Planet Hollywood, Bellagio, and Paris. Last time we went, we stayed at the MGM because we got a really good rate. To be honest, all the rooms were essentially the same. You are hardly in your rooms anyways.
Recommendations:
Mandalay Bay, Luxor, and Stratosphere are farther than they look on the map. Hard Rock is off the strip and although they advertise that they are close, they really aren't.
Stay away from Excalibur, Tropicana, Circus Circus (is this even still open?), Riviera and Imperial Palace.
There is a GREAT wine bar in the basement of the Rio. Totally recommend it.
We rented a car when we stayed at MGM and we went hiking in the Red Rock Canyon and we went shopping at the outlet mall in Primm Valley. However, basically our car was incredibly cheap, and worth it for us. That was the 5th time we went. For the first couple of times, I didn't want to leave the strip.
You can always take the skytrain as well. We took it more than we thought, and it was completely reasonable.
Have fun!