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Perhaps Amsterdam's greatest charm is also its greatest enigma: How can such a gracious cultural centre with an incomparable romance also multitask as the most offbeat metropolis in the world?

Built on a latticework of concentric canals like an aquatic rainbow, this remains the City of Canals—but Amsterdam is no Venice, content to live on moonlight serenades and former glory. Rather, on nearly every street you'll find old and new side by side: quiet corners where time seems to be holding its breath next to neon-lit Kalverstraat, Red Light ladies strutting under the city's oldest church.

Indeed, Amsterdam has as many facets as a 40-carat diamond polished by one of the city's gem cutters, from the capital, and spiritual "downtown," of a nation ingrained with the principles of tolerance to a veritable Babylon of old-world charm. While impressive gabled houses bear witness to the Golden Age of the 17th century, their upside-down reflections in the city's canal waters below symbolize and magnify the contradictions within the broader Dutch society.

With a mere 730,000 friendly souls, 179 nationalities, and with almost everything a scant 10-minute bike ride away, Amsterdam is actually more of a village—albeit a largish global one—that happens to pack the cultural wallop of a megalopolis. There are scores of concerts every day, numerous museums, summertime festivals, and a legendary party scene. It's vibrant, but not static (which is why the entry of the Grachtengordel canal ring into the UNESCO World Heritage Site list has not been greeted with universal joy). The city is making concerted efforts to broaden its appeal with initiatives like Project 1012, which aims to diversify the economy of the Red Light District. Just like construction in the rest of the city, Project 1012 is a work in progress, but there is light at the end of the tunnel. The scaffolding has come down around Museumplein, and new architectural landmarks, such as the EYE Film Institute across the IJ, are up.

Despite the disruptions, it's impossible to resist Amsterdam's charms. The French writer J-K Huysmans fell under its spell when he called Amsterdam "a dream, an orgy of houses and water."

So true: the city of Amsterdam, when compared with other major European cities, is uniquely defined by its houses—not by palaces, estates, and other aristocratic folderol. With 7,000 registered monuments, most of which began as the residences and warehouses of humble merchants, set on 160 man-made canals (stretching 75 km [50 miles]), and traversed by 1,500 or so bridges, Amsterdam has the largest historical inner city in Europe. Its famous circle of waterways, the Grachtengordel, is a 17th-century urban expansion plan for the rich and a lasting testament to the city's Golden Age, the 17th century.

Rembrandt to Rock-n-Roll

If we often take stereotypes with a grain of salt, in the case of Amsterdam, believe them; but at the same time, we need to remember that there's so much more. To find the "more," one must be deliberate in planning explorations; otherwise some visitors may find themselves looping back—as have sailors for centuries—to the city's gravitational centre, the Red Light District. After all, as a visitor you are hopefully here, at least partly, to unburden yourself of some misconceptions. Certainly this town is endearing because of its kinder, gentler nature—but a reputation for championing sex, drugs, and rock 'n' roll cannot alone account for Amsterdam's being the fourth most popular destination in Europe (after London, Paris, and Rome).

Carrying far greater weight—cultural, moral, social—is the fact that within a single square mile the city harbors some of the greatest achievements in Western art. Is there a conscious inmate of our planet who doesn't revere Rembrandt, who doesn't love Van Gogh?

The Joy Is in the Detail

Just remember as you tour all the must-sees that Amsterdam is such a great walking city because so many of its real treasures are untouted details: tiny alleyways barely visible on the map, hidden garden courtyards, shop windows, sudden vistas of church spires and gabled roofs that look like so many unframed paintings.

And don't forget that the joy is in the detail: elaborate gables and witty gable stones denoting the trade of a previous owner, floating houseboats and hidden hofjes (courtyards with almshouses).

Before tying on your weatherproof shoes, go efficiently local by toting an umbrella, for Amsterdam has a propensity toward sudden bursts of rain. A cloudy day should inspire a more lingering exploration of the Museum District, rich with other cultural refugees from rain.

Chances are you'll be rewarded with a sunny late afternoon and your walk along the Prinsegracht canal will shine at this time with the kind of glow you witnessed earlier that day in a Golden Age painting at the Rijksmuseum. With any luck, your best photo-op will probably wind up being a pavement artist putting the finishing touch on his version of Vermeer's Milk Maid.