Amalfi

"The sun—the moon—the stars—and Amalfi," Amalfitans used to say. During the Middle Ages Amalfi was an independent maritime state with a population of 50,000. The republic also brought the art of papermaking to Europe from Arabia. Before World War II there were 13 mills making paper by hand in the Valle Molini, but now only two remain. The town is romantically situated at the mouth of a deep gorge and has some good hotels and restaurants. It's also a convenient base for excursions to Capri, Positano, and the Grotta dello Smeraldo. The parking problem here is as bad as that in Positano. The small lot in the center of town fills quickly; if you're willing to pay the steep prices, make a lunch reservation at one of the hotel restaurants and have your car parked for you.