I can appreciate recommendations for the North Shore; it's indeed beautiful, stunning, and lush there. But the weather and ocean conditions you can experience in January on the N Shore could be quite different from what others have experienced if they went at other times of the year.
From Lihue, an excellent central location, you will be able to see as much of the island as you want, quite easily. I wouldn't plan too too rigidly, what areas you MUST see. See how the weather is when you arrive. Don't worry, you can't go wrong, no matter what you do in Kauai!
Finally took the Smith's Fern Grotto ride on third trip there, and was surprised by how much i lenjoyed it!! Sure, it's a bit touristy, but it's relaxing and takes you to a lovely spot.
Agree that best food of luaus on Kauai (and IMHO, the most "ohana" feeling) is at Princeville Hotel. A bit more expensive, but worth it. Aloha, and have a fabulous time!

WOW - everyone is so helpful and full of great tips. I can't wait to get home from work just to read your replies Thank you! thank you! thank you!!! Keep them coming.

I'm going without a strict itinerary - go with the flow and relax...great advise Calinurse. I'm sure the weather will help determine our plans once we're there.

Where are you from?? I know a Jim & Sandy going to HI around that time. Michigan by chance??

Hi Tommyd, we're not the same Jim and Sandy...we're from New Jersey though I'm originally a mid-westerner, but from Iowa - not Michigan.

My mom and dad went in 2001 and STILL talk about the puka dogs. They actually got theirs from the stand on the island rather than at the mall and have a picture of mom in the stand with the owners.

Love the shave ice over ice cream. My husband had to have it often while we were in Kauai.

Take some hiking clothes you don't care to part with. We slid and fell on the wet red mud several times on the hike to Kee. I brought the clothes and tennis shoes home and tried diligently to get them clean but we ended up throwing them all out.

We loved dinner at sunset at the Beach House on the south end and at the Princeville Resort on the northside.

We did the Kipu Ranch ATV tour and it was really fun, and allowed you to see sights that you wouldn't be able to see otherwise. Have a blast, it is a wonderful place!

Good tip about the hiking clothes - not worth taking them home. I'll also pack a plastic bag to avoid contaminating the rest of my clothes with my dirty hiking boots. Ditching the clothes will make room for more souveniers I can't wait, just a few more days....

I'm packed and ready to go. Our flight leaves in 10 hours I'll put up a new post upon my return. Thanks everyone for your help. I just printed the whole list of suggestions and will review it on the plane.

Paradise...here we come!

Have a great trip!!!