Arequipa felt like a Peruvian Italy to me. We loved the atmosphere and ended up extending our stay, just because.
Other good eats: The Creperie, Mamut (chorizo) and that one pizza place...
Strolled down streets that begged to be strolled.
Literally followed our noses to a McDonalds.
Found an imitation Irish Pub that had satellite television so we could watch OU beat UCONN. We were the only two people in the bar most of the night.
Stayed at Hostel Bothey - probably our least favorite hostel of the trip, but that's going off of a really good scale.
And we spent a crazy firework-filled New Years in the Plaza des Armas: we're talking no rules. Everyone out on the church steps with bottles of wine and fistfulls of fireworks they bought on the corner. So fun!