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Where to stay in Palermo - old town or new city?

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Hello, going to Sicily with my family (8 of us in all, including grandparents) and trying to figure out where to stay in Palermo for 3-4 nights. Frommer's mentioned that areas where you can find lots of restaurants in the evening are around Pza. Verdi and Pza. Castelnuovo, however doing research on some of the threads on this forum, it sounds like this is perhaps not the most central location for sightseeing.

We definitely want to be in the cultural heart, as we will primarily be interested in sightseeing (the older the better). Can anyone explain where that would be? Near the cathedral, or more close to Politeama? Will we be set for strolling in the evening and finding restaurant options either way?

Many thanks!

mp413

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