We're planning on visiting the Ouray/Telluride area in early Sept. Could anyone give us suggestions on things to do and places to stay?

From Ouray, go to Yankee Boy Basin.
It is the mountain valley west of the Camp Bird Mine. If the mines are still active, the road should be in good shape because the mine trucks use it.
If not, then you might want to hire a jeep driver to take you up for the ride of a lifetime.
Wildflowers usually are in abundance in the summer. The scenery is great, with Mount Sneffels the highest peak in those parts, reaching over 14,000 feet.

Telluride is also at the base of a steep mountain wall.

There are some great hot springs in the ouray area. Our favorite is called Orvis which is a natural spring and is clothing optional.

go to www.twenj.com and go to the links on San Juan mountains Colorado. Lopts of advice there

I really liked the Ice House in Telluride. It's a group of privately owned condos about two blocks off the main drag. The unites are beautifully decorated, and the location is ideal.

We were there a few years back when our kids were around 12 and 8. We camped at the National Forest campground at Ouray, which was quite nice (if not very scenic). The town's hot spring pool was enormous, with several levels of heat. There's a mine tour which was worthwhile. Yankee Boy Basin is a must-see. Hire a jeep and driver if you don't have 4-wheel drive. The town of Silverton isn't far away, and very worthwhile.

Lisa,
We were in Ouray for 3 nights last spring. There is a wonderful Mexican,
(southwestern) restaurant on the left
side of the main street(traveling south). I can't remember the name, but
don't miss it. The food was fresh, flavorful. If you like Mexican, you'll love it.