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48.8 Partly Cloudy Nearby Airports: AMS

Perhaps Amsterdam's greatest charm is also its greatest enigma: How can such a gracious cultural center with an incomparable romance also multitask as the most offbeat metropolis in the world?

Built on a latticework of concentric canals like an aquatic rainbow, this remains the City of Canals—but Amsterdam is no Venice, content to live on moonlight serenades and former glory. Rather,

on nearly every street you'll find old and new side by side: quiet corners where time seems to be holding its breath next to neon-lit Kalverstraat, Red Light ladies strutting under the city's oldest church.

Indeed, Amsterdam has as many facets as a 40-carat diamond polished by one of the city's gem cutters, from the capital, and spiritual "downtown," of a nation ingrained with the principles of tolerance to a veritable Babylon of old-world charm. While impressive gabled houses bear witness to the Golden Age of the 17th century, their upside-down reflections in the city's canal waters below symbolize and magnify the contradictions within the broader Dutch society.

With a mere 730,000 friendly souls, 179 nationalities, and with almost everything a scant 10-minute bike ride away, Amsterdam is actually more of a village—albeit a largish global one—that happens to pack the cultural wallop of a megalopolis. There are scores of concerts every day, numerous museums, summertime festivals, and a legendary party scene. It's vibrant, but not static (which is why the entry of the Grachtengordel canal ring into the UNESCO World Heritage Site list has not been greeted with universal joy). The city is making concerted efforts to broaden its appeal with initiatives like Project 1012, which aims to diversify the economy of the Red Light District. Just like construction in the rest of the city, Project 1012 is a work in progress, but there is light at the end of the tunnel. The scaffolding has come down around Museumplein, and new architectural landmarks, such as the EYE Film Institute across the IJ, are up.

Despite the disruptions, it's impossible to resist Amsterdam's charms. The French writer J-K Huysmans fell under its spell when he called Amsterdam "a dream, an orgy of houses and water."

So true: the city of Amsterdam, when compared with other major European cities, is uniquely defined by its houses—not by palaces, estates, and other aristocratic folderol. With 7,000 registered monuments, most of which began as the residences and warehouses of humble merchants, set on 160 man-made canals (stretching 75 km [50 miles]), and traversed by 1,500 or so bridges, Amsterdam has the largest historical inner city in Europe. Its famous circle of waterways, the Grachtengordel, is a 17th-century urban expansion plan for the rich and a lasting testament to the city's Golden Age, the 17th century.