Alhambra is the big attraction in Granada but you might also want to ask around for the Gypsy Flamenco dancing that you do inside a cave on the side of the mountain.
"Cueva de la Rocio" was the place that I went to. It was awesome. They serve you a drink while you are there (included in the ticket price). I think we paid 20 euros.
Then we took a walk through the town at night time and saw the Alhambra from a look out point lit up at night. It was just beautiful. about 8 years ago
Casa de Vinos la brujidera between plaza Isabel la catolica and plaza nueva. It is very small vine house. They have great variety of local wine and special tapas. They don't have big food menu but, whatever they serve is the best. Antigua bodega castaneda on calle Elvira is a very good restaurant and pub. Food is very good! Don't miss their sangria. Granada is best place for budget dining. Most of the pubs offer free tapas when you buy a drink. about 6 years ago