My favorite thing about my neighborhood (besides the Whip In - http://www.afar.com/highlights/a-south-austin-institution) is South Congress Avenue. It is home to my favorite coffee shop and several of my favorite restaurants (South Congress Cafe, The Woodland, Enoteca, Vespaio, etc..).
There are tons of little boutiques (most locally owned - American Apparel is the only imposter here) and an old style barber shop. There are salons, toy stores, candy shops, and book stores. There are high-end boutiques and places that sell great souvenirs on the cheap. This is a great place to buy gifts or an Austin themed t-shirt!
There is also an artist market here on the weekends. There are hawker stalls and food trailers selling every type of cuisine. There is usually live music playing at a venue like the Continental Club. It is easy to spend hours strolling up and down this iconic avenue.
This is also a great place to stay with Hotel San Jose and Hotel Saint Cecelia offering some of the coolest boutique accommodations found anywhere!