Colonia del Sacramento is a small Portuguese colonial town listed as a UNESCO World Heritage Site. It is also a city that is quick and easy to get to from Buenos Aires, which makes it perfect for people who want to get out just for a day or two for sightseeing, visa runs or to pick up usd for exchange at the Argentinean Blue Market. The 50 minute boat ride costs around 30 dollars one way or around 38 dollars if you buy a boat and bus combi ticket that takes you even further to Montevideo.
The city is really small with its around 20 000 inhabitants, and the city can easily be seen in a day. We arrived early in the morning and rented bicycles (4 dollars/hr) to ride around on the rough stone paved streets that made up the old city. It was a really quiet and relaxing place with plenty of small parks to have a picknic and many small restaurants with ocean view for dinner. The main attraction of the city is probably the lighthouse (faro), where lots of people go up (about a dollar entrance) especially around sunset to get a view of the city.
There are also a few hotels and hostels, but I think as long as you get there early and take a evening bus or boat out you will feel that one day is enough to explore the small city of Colonia del Sacramento.