Hanging out on the vaporetti - Venice's water buses - was one of the highlights of our trip. We hopped on and off them regularly but our favourite time was early evening, when the locals were taking their shopping home and the heat of the day only remained in the stones of the buildings.
The vaporetto is the best way to the see the Grand Canal, to take in its famous palazzi in one great swoop. One thing worth trying is to take the N or the 2 line from one of the San Marco stops, round the outside of the island. It's a more unusual route and it's less crowded!