On our way back to ny from toronto we're thinking of 2 or 3 days in stratford or niagara-on-the-lake. We don't know much about either on - any suggestions as to choice, hotels, etc.

They are similar experiences and the determining factor might be the theatre choices... if you plan on attending plays, have a look at the schedule... if not, NOTL is on the way back from Toronto, Stratford is a few hours out of the way.... also NOTL offers the Niagara Wine region, several scenic vineyard restaurants and the Falls area... Stratford is quaint and pretty, but unless you are moved by a particular play, Niagara should meet your every need and save you about a 3 to 4 hours drive each way... have fun!

To be fair, I haven't been in Stratford for a while but I've always thought NOTL was the more charming town.

I visit both towns several times per year. The plays you want to see are certainly one consideration. Otherwise -both towns are quaint with lots of little shops and upscale bistros and restaurants. However, they're small and you wouldn't spend all your time over several full days in either - but there are nearby daytrips. Niagara-on-the-Lake is centered in the large Ontario Niagara wine district with many wineries to tour and taste, some of our wines are quite excellent and becoming world-renowned. And the scenic Niagara Parkway runs between Niagara-on-the-Lake and Niagara Falls. Some beautiful overlooks of the river and horticultural gardens enroute. The Falls themselves are worth seeing if you haven't (only about 1/2 an hour away).
Near Stratford are the mid sized cities of Kitchener-Waterloo (about 35 minutes). If you're there on a Thursday or a Saturday, there is a large and famous Farmers Market and Craft Market at the north end of Waterloo, called the St. Jacob's Farmers Market. The actual historic village of St. Jacobs is a couple of more miles north, and is quaint and charming with many specialty, antique and craft shops. This is surrounded by "Mennonite Country" and you'll see the horses and buggies travelling the side roads. Stratford is the home of a famous Chef's School and this is reflected in the dining options there. Although there is also good dining in NOTL, and a group of very upscale "Inns".