My wife and I spent two weeks there a few years ago: one week in Kauai and one week on the big island. First, check out the pictures. We decided to do everything in bed-and-breakfasts rather than hotels. It's a little hit-or-miss, but I can specifically recommend a b&b in Poipu, Kauai with a killer view. I can also recommend a small place in the hills over Kauai. Good view, friendly cats. Links are on my page, above.

Kauai factoids: Kauai is the oldest island in the chain. That means more green stuff and less lava. It's got spectacular hiking. Also, you only need one hotel or b&b. Nowhere on the island is more than 60-90 minutes drive away. The south-side of the island, Poipu, is where all the big trophy retirement homes are and where you'll find most of the fancy restaurants like Roy's (a nice restaurant, but there are better restaurants in the same price bracket). If I could go back to Kauai again, I'd want to do an overnight hike on the north side of the island. The full hike is 12.5 miles to get all the way in. We only did the first three.

Big Island factoids: I had no choice but to visit the big island. I wanted to see red, hot lava. I wasn't disappointed. The west side of the island is where most of the tourist hotels are. The island is big enough that, if you want to spend a couple days poking around Volcano National Park, you're going to want to stay nearby rather than driving from Kona. In terms of spectacular waterfalls, you're not going to do much better than Akaka Falls, which I seem to recall is somewhere on the northeast side. That's also where I found the best aloha shirts, made by the woman running the store.