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Puerto Rico vs Dominican Republic

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My husband and I are in our 30s and other than Cancun have never really traveled. We love the carribean water, eating, relaxing, and are somewhat adventerous. I thought it would be great to go to Punta Cana in DR because I hear it is beautiful and thought all inclusive would be a nice more affordable way to go. However, other than resorts I'm not sure what else there is to do considering it is not close to any towns. My husband wants to go to Puerto Rico and so do I but we are not sure which island would be the most fun.
If we go to DR, what part should we stay at where we can relax at the beach and get to know the people and culture?
If we go to PR, same question and do you recommend renting a car? Is it more cost effective rather than paying for taxi's or is it more expensive with paying for parking and insurance? We are planning on going in Jan 2012 for our anniversary and are staying for 7 days. I really don't want to spend more than $2500 for airline and hotel which after reasearching online seems reasonable.
Last question. Anyone recommend staying in a vacation home rather than a hotel? There are some really nice affordable ones in PR. I saw a few that were as cheap as $500-$700 per wk directly on the beach. Any suggestions would be greatly appreciated.

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