For a great (and cheap) place to stay check out the Cottage near the city center on statravel.com. Only $65/night!

Of course, Montevideo is the place to be. To do something a little different, check out La Pedrera, a village on the hill with an astonishing rocky shore. Between stones it has an amazing variety of sea life forms. Small fish, crabs, snails and selection of algae get caught at low tide.

Here is interesting little fact about Urughuay:
Day of Gnocchi
Most Uruguayan restaurants make a big deal of serving gnocchi on the 29th of each month. In some places, this is the only day you can get it. The tradition dates back to tough economic times when everybody was paid at the end of the month. By the time the 29th rolled around, the only thing that people could afford to cook were these delicious potato dumplings.