Crete is the largest of the Greek islands, so much so that to see everything you either need to stay for a longer period of time or perhaps even do it over several holidays. I would probably suggest several holidays as the better option - you could spend one holiday in the east of the island and one in the west and cover all the sights this way with reasonably short drive times. Apparently, even the climate is different between the west and the east of the island - the west, especially north-west tends to get more rain in the winter months.
With regards to things to do, Crete has something for everyone. There are long sandy beaches for the lazy, old towns like Rethymnon and Chania to explore for shoppers and architecture fans and hiking tours through beautiful gorges like Samaria and Imbros for the outdoorsy types.
Chania (pronouned Kh-ania) is the second largest city on Crete located on the north coast in the western half of the island. Chania has its own airport, so if planning to stay in that area, you might want to get a flight there rather than Heraklion.
It is a beautiful place with a Venetian harbour and numerous waterside restaurants and colourful houses. The old town has charming narrow streets lined with shops. The beauty attracts a lot of tourists though, so it does tend to get crowded - bear that in mind if you decide to make Chania your base for the holiday.
Boat trips are for sale in the harbour area in case you decide you want more than just walking around.
If you want to visit Chania for a day trip and not sure about renting a car, the city can be reached by bus (for example, from Rethymnon the journey takes about 1 hour) and Chania bus station is within an easy walk to the harbour.
Smaller and quieter that Chania, Rethymnon still has tons of old world charm. The town has a large fortress, a Venetian old town and a small old harbour with a lighthouse as well as a more modern port, from where you can get the ferry to Santorini.
Rethymnon beach is a sandy strip that stretches forever and you can go for a lovely walk either on the beach or on the paved promenade. There is a fresh juice stand along the promenade that makes the most awesome juices!
With plenty of restaurants and shops to keep you occupied away from the beach, Rethymnon has a lot going for it, so I would highly recommend it as a place to stay on Crete.
The gorge of Imbros could be called the baby sister of Samaria gorge. It is smaller, easy to get to and easier to walk. It is also less popular, which to me made the walk more enjoyable as apart from our group there was hardly anyone there.
On the pictures that the local tour agencies show you, Imbros gorge doesn't look spectacular, especially if there's a photo of Samaria gorge next to it. However, don't be put off - it is a beautiful walk, which will take about 2.5 hours. The tour bus drops you off at the entrance and picks you up by the exit, which I felt was an easier option than the arrangements for Samaria gorge (the short walk tour there meant having to turn around and go back before reaching the best views, while the long walk tour involved a bus and a ferry plus 5-7 hours of walking).
What can you expect to see in Imbros gorge? Apart from the rocks, there are numerous local plants, so it's a great option for all the gardening lovers out there - you will enjoy smelling the different leaves.
Advice before setting off? Make sure you have good walking shoes (I didn't and walked in sandals, and, while manageable, it gets quite unpleasant on the rocky bits towards the end. If you don't have proper walking shoes, at least wear something that covers the toes). Bring a big bottle of water and perhaps even a small snack. There is a bar/restaurant by the entrance, so if you don't manage to prepare in advance, you can get something there. Finally, make sure you use the facilities before setting off - there is a toilet around the midpoint of the walk, but it's not for the picky...
Frangocastello is a small village on the south coast of Crete, The main attraction of Frangocastello is a stunning Venetian fortress built in the 14th century. The Venetians actually called the castle St Nikitas after a nearby church, but the locals referred to it as 'the castle of the Franks' or Frangocastello.
The castle is the location of an important battle of the 19th century and a legend says that on the anniversary of the battle (in May), you can still see the shadows of the soldiers walking towards the fortress. There is a real-life explanation for the mysterious shadows however, which is that they are a meteorological phenomenon.
There is also a lovely beach by the fortress, so you can combine sightseeing with a relaxing afternoon swimming in the sea.