This relatively small country is at the true heart of gaucho country, with its estancia's in the interior and beautiful colonial towns and cities hugging the coastline.
Montevideo, the capital city of Uruguay is teeming with cultural diversity, and yet retains its colonial Mediterranean atmosphere, full of wide tree lined boulevards, plazas and colonial architecture. The Mercado Del Puerto is Montevideo's old port market and survives today by housing good seafood restaurants and the more traditional parillias (grill style restaurants). It has impressive museums and a fantastic sea front with beaches and promenades. There is good transport to and from this city, and a good ferry to Argentina.
By going inland you can stay on an estancia (a very large farm) with the gaucho's very easily and there are many places to book these excursions in Montevideo. The estancias vary in comfort and in what they provide, but you can guarantee that you'll be horse riding in no time at all.
Colonia del Sacramento is a few hours west of Montevideo and is easily reached. This is a picturesque colonial town with its narrow streets, colonial buildings, old fort ruins and lighthouse. All you need is a few hours here as there is not much to do apart to walk around and admire the old town. If its a pleasant day relaxing on the seafront with a few cold beers is a good way to pass the time, especially since the 7 museums are not the most interesting you will ever see. Do not be surprised when you see horse drawn carts on the main road, nor the 1930's rustic cars that litter the curbs around certain bars. This town also has a ferry to Buenos Aires that is cheaper than the one from Montevideo, and so is defiantly a place to see if you are passing though or fancy getting out of Buenos Aires for a day.