I will be going to Key West and would love suggestions on places to stay, eat and shop! I would like to be in a good location (help appreciated with that, too) and a nicer place. Thanks in advance!

Was there in June for my honeymoon and DH and I stayed at The Gardens Hotel. I do not think any other place could match it. The gardens are beautiful, the pool is great and the rooms are very nice. Breakfast was very good. Just a block off Duval, but very private.
Ate at Micheal's and Seven Fish. Both were great.

Mallory Pier for sundown.

If you have a car and can drive a bit, Mangrove Mama's at mm 21 for a dinner.

Half Shell Raw Bar at the Turtle Kraals is a great casual lunch or dinner.

The waterfront bar/cafe at the Hilton is a fine evening destination.

The restaurant at Pier House is a beautiful waterfront setting for lunch or dinner.

Love to stay at the Island City House and Simonton Court. Both are gorgeous.
www.islandcityhouse.com
www.simontoncourt.com
Casual dining - Blue Heaven, Bo's Fish Wagon, Half Shell. I've read excellent reviews about a place called Santiago's Bodega. It is in an out of way area of town, but everything says it is great. A new restaurant called Wreckers by chef Norman Van Aken is supposed to be opening soon - it should be worth a visit.

Nicer Dining - 915 Duval. Ate at Seven Fish in August and were disappointed by our meal, but the reviews are very good otherwise.

Love to sit at the outdoor bar at El Meson de Pepe for mojitos. Happy hour on Duval is also fun.

Shop for Kino's sandals near Mallory Square. Great, cheap leather sandals you can only find at their workshop. It's worth seeking them out.

Louie's Backyard-excellent restaurant
Sarabeth's too
Would like to second Blue Heaven

Do a search here and you'll get tons of info.
The Gardens is also my favorite hotel.
For a casual lunch I like Turtle Krall's, which is situated on the water.
For breakfast, I like Blue Heaven (which has become a tourist mecca, unfortunately).
As to shopping, well Key West isn't exactly Fifth Avenue. But just walk up and down Duval Street and you'll see (nearly) everything Key West has to offer in the way of stores. Fast Buck Freddie's is always interesting. (And the air conditioning feels great.)

Do not miss Alice's Restaurant on Duval. Inventive, eclectic, delicious and reasonably-priced menu. I have also enjoyed Mangos on several occasions. Beware pretty ambience with poor, overpriced food establishments...they abound in Key West. Do your homework if good food is important to you.

We stayed at the Marquesa - it was really charming, had nice service, and a pretty pool area out back. It's close enough to Duval to walk but not so close that you hear the noise. We liked Mangoes restaurant for dinner.