The Chinese call Zhouzhuang their "Asian Venice" for good reason, and although this village (60 yuan entry fee) is far smaller, it contains abundant treasures... 900 year old traditional Chinese houses and courtyards, hundreds of shops (silk wares, souvenir trinkets, arts and crafts), pottery and rice wine making exhibits, a Buddha statue museum, temples, and an open air opera house with daily performances.
There are a few good restaurants outside of the village, but it's an overcommercialized zone you'll want to avoid. If you can, visit on a sunny weekday, as sunny weekends bring Chinese tourists and (according to my Shanghai friends) the tiny alleyways where all the shops are located can get too crowded. While browsing there you'll want to sample some of the snacks offered along the way... date filled rice balls, etc.
Zhouzhuang was recently declared an International Heritage Site by the United Nations. One of the most famous compounds inside the village, Shen's House, has 7 courtyards, 5 archways, over 100 rooms, a wharf and water gate... a few rich families formed the core of this village long ago. While walking through Zhouzhuang is extremely enjoyable, 1 hour gondola rides (60 yuan) are available as well.
The best way to get to Zhouzhuang is bus... 7 departure times are available from the Shanghai Bus Station (beside Shanghai Stadium) and the ride takes approximately 90 minutes. Upon leaving Zhouzhuang you'll probably be taken to the silk factory on the edge of town, but there was no high pressure sales, and I found it quite fascinating (including demonstrations of all the steps required to make silk ~ I held some worms!).