Just got a bit more information on where you might wish to travel to outside of Lisbon. Sintra is about 40 minutes away by train from the centre of Lisbon. It was described by Lord Byron as his "Eden" and there some interesting castles worth exploring. If you don't mind travelling a bit further, the walled ancient town of Obidos lies about an hour and a half from Lisbon by train again. Stay at the Albegeria Santa Isabel which is located within the walled city, right on "Main St" as it were.
If you are planning to drive, be warned that gas is relatively expensive in Portugal. I found the buses, trams and trains services to be quite adequate for getting around. Hope this helps.
I was just there in August for vacation. Beautiful city, similar topography to San Francisco There is a lesbian scene in Lisbon, I was told but I didn't find one (I wasn't looking too hard). I stayed at a Residencial (Hotel) in the Baixa, close to the bar/club area of Bairro Alto. There are helpful tourist info desks in the airport open 9-5 (at least this summer during the Expo there were). I also stayed at the Hotel de Torre over in the Belem area, near the monastery and the Torre de Belem. About $90/night. Both were three star hotels. I would suggest staying in the Bairro Alto or Baixa, close to main squares and bus transport to the Castle and ease of taxi service.
Fado is the Portuguese cultural music, but mostly performed for tourists and at very high prices for the food you get. Shop around for fado music first. There are several places in the Bairro Alto within blocks of each other. I paid $50 for a mediocre dinner and ok fado music.
Summer traffic from Lisbon down to Algarve (the south coast) is horrendous, drivers are insane, and the roads are curvy. Cute town that is train accessible is Tavira. The Algarve is irrigated desert and is quickly becoming overrun with real estate buying buffoons. Golf is very popular down on the Algarve year round.
I didn't make it to any discos in Lisbon, couldn't find them. Wanted to go to:
Alcāntara Mar on the docks, but I went to the wrong docks. There is apparently a cool gay/whatever disco there called Kings and Queens.
I drove from Quinta de Lago, Portugal (on the Algarve) through Spain to port Algeceiris in 5 hours to then ferry over to Tanger, Morocco. Tanger is an incredible place, though I don't suggest going alone, unless you are willing to get haggled and willing to buy a carpet. I was willing, but not everyone is. You can make it a day trip from Algeiceris, Spain. I hope this is helpful in some way. Some pix of Portugal (Algarve) are on my website.