Simply put, Hangzhou is suprisingly beatiful. I was actually really caught off guard when I arrived. I was not expecting such a scenic spot in the middle of China. Well that isn't entirely true, but after being surrounded by the same grey buildings for months it was a pleasant surprise to find a city like Hangzhou.
The city is a 45 minute train ride from Shanghai, that is if you use the High Speed train option. Otherwise it is something like a couple hours. In either case it is definitely worth a day trip or even a couple days.
Succinctly, the city grew up around "West Lake" which is a very large body of water that has turned into a popular scenic attraction for both foreigners and mainlanders. While the day we were there was not really clear, nor sunny, it was certainly worth it.
It is interesting to note that while the local government has taken great lengths to preserve and foster the natural forest-like feel around the lake, just a mile away is the actual city center of Hangzhou with all of its business buildings and the like. Basically, as soon as you leave the lake the city looks just like any other major city in China.
For your reference: http://en.wikipedia.org/wiki/Hangzhou
We actually only had an afternoon in the city, which limited our options of tourism. The rest of the guys (roommate and other students) thought of a way around this problem-- tour the city on 3 seat tandem bikes!! So we did. Just imagine, two 3 seater tandem bikes being driven by Americans through the busy streets of an ancient Chinese city. Yep it WAS that awkward, and I am pretty sure we almost hit a bus a couple times.
And remember if you ever drive tandem bikes through a Chinese city it is ALWAYS proper to bring along as many cartoon balloons as possible. It adds to the experience.
Below: the train station in Hangzhou on the way back. The place was packed and this seems to be the norm around here.