Sukhothai is one of the two old capitals of Thailand, located at the bottom of the northern provinces. The city itself has mainly moved to the "New" Sukhothai nearby, where all the guesthouses are, but the old temples and whatnot are still in the old city.
I can recommend the TR Guesthouse very highly as a place to stay. The rooms are good value at 150 baht for a decent room with a desk, huge bed and attached bathroom. The owner is incredibly helpful, with timetables for buses, trains, free maps and advice on how to get places cheaply. Well worth it.
There are probably other things to do here, but I was in town less than 24 hours total, so all I saw were the ruins and temples of old Sukhothai. Photos will end up here sooner or later. You can take songteaw there for 20 baht each way, which isn't a bad deal at all. Hire a bike out there, grab a bulk ticket for 150 baht for all sites and check it out. For any advice, ask the guy at TR Guesthouse, no problems.
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