Our first stop in Nicaragua was beautiful San Juan Del Sur. We found a quaint little hostel and spent a couple of days at the beach and the rest of the evenings reading, playing scrabble, cards and lounging in hammocks!
Then we rented a car and drove out to Grenada for the afternoon. This is an absolutely gorgeous city with lots of history.
There are boat tours of Las Islatas in Lake Nicaragua, just outside of the city--there are over 100 little islands that you can buy and build property on. There were some amazing homes out there...anyone want to buy an island?