Based on your criteria, I believe there are five parts of the city to explore, and they are all within a 20 dollar can ride of one another. Louisville is fiercely neighborhood oriented and it has some great ones. I will provide you with A FEW (too many good places to even pick from) restaurants and or bars, shopping and hotels I think you will like that will let you explore these areas. If you dont like the spot I suggest, it will always be within walking distance of tons of other stuff.
1) The Highlands
www.thehighlandsoflouisville.com: The beat of Louisville, its soul, and what makes it a great city. A bit of Haight-Ashbury in flavor but with a southern/midwestern twist. This neighborhood is only appreciated on foot, walking its spine of Baxter Avenue and Bardstown road. Park at
www.mollymalones.com and walk south, to the left of KFC. A FEW places that will help you explore:
http//www.lynnsparadisecafe.com/
run or walk through cherokee road, willow ave, and cherokee park
http://www.louisvilleky.gov/MetroParks/parks/cherokee/
http://www.dundeetavern.com/
http://www.spinellispizza.com/
http://www.cafe-360.com/ (my vote for dirt cheap 24/7 food)
http://www.palermoviejo.info/
http://www.clayandcotton.com/shop/
http://www.herbimport.com/pages.php?pageid=1
http://www.asiatiquerestaurant.com/ (ask about their lounge "A" and late night menu)
http://www.ramsiscafe.com/
http://www.kizito.com/
http://www.whylouisville.com/
http://www.uptownlouisville.com/
http://www.dotfoxclothingculture.com/
http://www.heinebroscoffee.com/
www.keeplouisvilleweird.com
www.louisvilleoriginals.com
many of the small retail boutiques will close early by rush hour, but the coffee shops, restauarnts and nightlife on this strip rock late (at least til 3 or 4 am so many bars dont pick up until almost midnite, especially on the 900 block of Baxter Avenue).
2) Downtown/Butchertown/Phoenix Hill
http://www.louisvilleky.gov/Downtown...wnActivity.htm
Not too impressive as downtowns go, but overall very solid, with an excellent urban Park
http://www.louisvillewaterfront.com/
Hotel Louisville Kentucky :: Downtown Luxury Lodging (and its restaurant)
lots of museums near there in the largest district of cast irons outside SoHo NYC. I'd stay at 21C as my pick if not a B&B. There's also a nice B&B in historic downtown Jeffersonville across the bridge.
http://www.actorstheatre.org/
Historic Homes Foundation (Washington st and Franklin st are interesting as they mix historic homes in the nation's largest remaining urban meat packing district)
http://www.firstfridaytrolleyhop.com/ (many boutiques and restaurants here open outside the gallery hop, which is great fun if you are in for it the first friday)
http://www.seelbachhilton.com/hoteld...heoakroom.html
http://www.jeffruby.com/louisville.html
http://www.myspace.com/derbycityespresso
http://www.louisvillepalace.com/
You probably won't like fourth street live based on your tastes, but it is a pretty happening nightlife district after 11 PM on Saturday especially (bars open til 4 am)
3) Crescent Hill/Clifton in the Frankfort Avenue commerical corridor
http://www.frankfortave.com/home/index.php http://www.fatfridayhop.org/
http://www.bourbonsbistro.com/
http://www.landnwinebarandbistro.com/
http://www.basarestaurant.net/
http://www.varanese.com/
http://www.maidosakebar.com/
http://www.northendcafe.com/
http://www.gosarisari.com/
http://profile.myspace.com/index.cfm...ndID=323122782
4) Old Louisville. Lots of B&B's, some nicer than others. St James and Belgravia courts are worth walking for their beauty. The largest historic victorian preservation district in the US. A mix of students, professionals, gays, and low income people. It is not as walkable as the top three districts, but has some well hidden gems
www.oldlouisville.com
http://www.bucksrestaurantandbar.com/
www.610magnolia.com (highly worth it, wouldnt be out if place among the nicer places in SF)
http://www.amicicafelouisville.com/
http://louisville.metromix.com/resta...497546/content
http://www.thirdavecafe.com/
5) The Heart of St Matthews: this is the "downtownish" area of an inner ring suburb, NOT the mall with the same name further east.
http://www.brendanslouisville.com/ (very popular with young professionals)
http://www.60westbistro.com/
http://www.saintspizza.com/
http://www.clodhoppers.com/
http://louisville.metromix.com/bars-...497643/content
6) Germantown: A cool neighborhood all its own, a mix of working class people in old school southern shotguns to new age hipsters, hanging out at one of the better indie taphouses in town (a bit divey in a kitchy way though):
http://profile.myspace.com/index.cfm...ndID=167548389
I am out a breath, but this is part of a tour and city guide I am putting together. There are many great things to see and do outside of these hoods as well. My five favorite, affordable eats outside these districts are:
www.larositagrill.com
http://www.myhavanarumba.com/
http://www.mojitorestaurant.com/
http://louisville.metromix.com/resta...498358/content
http://www.crackinwildeggs.com/main.html
helpful sites:
youve seen me reference metromix, and while cheesy, its helpful, especially for mapping local eats and geting numbers:
www.metromix.com
www.leoweekly.com
www.louisvillehotbytes.com (especially the free forum)
www.consuminglouisville.com
www.backseatsandbar.com
www.brokensidewalk.com
Sorry, should mention more authentic microbreweries:
Cumberland Brews
New Albany Brewing Company- a bit of a drive, and a generic location, but one of the higher rated brewpubs in the US.
With regards to Derby festival, you need to be specific as to days you will be in the city, and I can advise on events to attend. It is a massive, two week event drawing millions to the city. It kicks off with the largest fireworks show in the United States, Thunder Over Louisville (attendace usually around 750,000), and of course ends with Derby which has crowds over 150,000 alone. If you will be coming any time anywhere near Derby or Thunder, you need to book a hotel....NOW.
www.kdf.org