Hi Yorky,
I was there during the summer,while I was interrailing and I would advise staying away from restaurants on the square as I found them expensive by Polish standards and not that nice. Same for drink. For food go down side streets off the main square. We(as in 6 lads) tried to get a table in a restaurant in the Jewish district that we heard was very nice but it was packed but there's loads of places to eat down there. Tip for when your paying your bill-if its say(equivalent) €56 and you give them €60 and say 'Thank you',they will interpret this as a tip and not give you your change whether you meant you wanted it back or not.
Plenty of clubs around the square for dancing etc!
Auschwitz is a must see,plenty of tours that go out there first thing in the morning.Some stay for the day and a few of them combine a afternoon visit to the salt mines.Personally after the morning intake the salt mines could have been avoided! Didn't go up the cathedral on the main square due to time constraints but I was recommended it!
You can exchange money in what are known as 'Kantor', rumour has its how the Mafia get rid of there Polish money in exchange for €,£ and $. Can be easier to change money in them than banks and some give better rates than banks but have a quick look around cuz they can vary themselves.
Overall a very nice place and was a highlight on our travels!
Hope its of some use!
All the best and enjoy
Half Scot