Damme

If you're considering staying outside the city, I would go to the coast. Look into De Haan or Zeebrugge. Damme? Ok, but...Meh...

It is a short drive or a bit longer bike ride and nice enough to go out to and back, but not a whole lot there and not much of a village.

As Tom and Nigel said, there is very little to it. One or two cafes/restaurants, a church and the rest is residential. Didn't notice stores, there must have been a couple, but not any that we noticed. We rode our bikes there from Bruge, very easy bike ride, and rode all over Damme. Driving there would be fast and simple. We spent an hour sitting outside at the only cafe/restaurant I remember seeing, and that was more than enough time in Damme. I'd recommend staying in Bruge. Absolutely loved it.

It depends what you are looking for. If you love the tranquillity of the country-side in that case Damme is certainly worth to consider. The area with the canal and the polders is a popular place for cycling, in the weekend it will be busy, during the week depending on the time of the year it’s much more quieter. It’s not a place for excitement but the little market place with it’s Gothic townhall is nice, between April and September you can climb the church tower for a nice view over the surrounding area and the church itself will be open. You can also walk over the old ramparts and along the windmill, so it’s possible to keep yourself busy for a few hours. There are enough restaurants, a dozen is a more realistic figure and little cafés on the country side to enjoy a meal or a drink during a cycle tour.
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There is a direct busconnection with Bruges, during the summermonths a (fake) paddle-steamer has a service between the two places. You can also cycle along the canal to Bruges, seeing the belfry tower and chuch steeples at the horizon. It also gives the opportunity to experience the more quiet parts of this city first as an introduction to the famous spots.
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Damme is more a place for tranquillity, to get relaxed. How you will experience this place will be more a matter of preference to my opinion.
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Tom, why do you recommend Zeebrugge?

"Tom, why do you recommend Zeebrugge?" Mainly because it's close. I prefer De Haan, though.

I know it is close, but Zeebrugge is far from pretty, maybe you have seen something there I haven't seen yet, besides the old Russian submarine and the lightship in the harbour one can visit. I agree with De Haan.

If you want quaint, I'd stay in Bruges! I love that town. We also rented bikes and rode out to Damme along the canal - it was a blast! Damme is very cute too, but as others have said, it's very small. When we were in Bruges last November, we stayed at Dieltens B&B and paid 70 euro a night. This included a lavish breakfast each morning in their beautiful and charming dining room. Great location and wonderful hosts.

I would definitely stay in Bruges. Its quiet and beautiful at night when the tourist buses are gone. Lots of places to eat and stroll. I would also rent bikes and take the canal trail to Damme. Loved that part of our stay. We biked out, had lunch in Damme and then returned. We had the bikes for the whole day by renting them for a couple of hours because we had Rick's book. Sorry I can't remember the name of the bike rental but it was in the book.

Those who like to bike and want to see more of that area one can bike further from Damme along the canal where it crosses other canals, locally known as the Sifon. Much further cycle over the canal at the first bridge or just turn left there depending on what side of the canal you bike. Follow the winding narrow road to lovely Oostkerke. From there is also a narrow road to the white windmill. You can go further to Sluis along the canal and tiny St Anna ter Muiden in the Netherlands and even explore the biker friendly country-side north of Sluis. Nice area especially during the week when it is more quiet and if the weather is fine.