We will be there for one night. What would you recommend we do there?
"For one night...." What times of the day/night will you be there? Your times will make a difference on what's open. If you're not going to get out of the hotel until 5pm, a museum probably doesn't make sense.
Let us know, so we can give you more helpful advice.
Rick's article at http://www.ricksteves.com/watch-read-listen/read/articles/great-sights-and-new-insights-in-dresden includes web links to a few of the top attractions.
And another one, without any links: http://www.ricksteves.com/watch-read-listen/read/articles/dresdens-inspiring-rebirth.
We did a walking tour of the Altstadt starting with the reconstructed Church of Our Lady that the Allies bombed:
http://www.frauenkirche-dresden.de/en/home/
It included hearing the church organ and Zwinger complex.
It was a two or three hour tour but the ski organization organized it and I don't know the who and how much details.
Laura's two suggestions are good. The first is a reminder that for all our expenses traveling, a good guide book is a bargain. Rick's guides are particularly useful in prioritizing the things to see on a limited stay. Rick's must sees are generally mainstream taste.
The second link is a reminder of the kind of history we don't want to repeat.
The Tourist Info offers a good walking tour in English for 12 €, that is put on by Dresden Walks. http://www.dresdenwalks.com/en/homepage-2/
I really enjoyed the Green Vault and all of the other rooms in this museum, though by the end of the day I was overloaded with the amount of glitzy, but magnificent items I had seen. For something different, you could also do the underground fortress fortifications.
http://www.dresden.de/dig/en/sightseeing/sehenswuerdigkeiten/historische_altstadt/festung.php
Dresden offers world-class museums and a very small, partly reconstructed old town with some important buildings. I would see one museum in the morning and one in the afternoon, and between the two visits explore the old town and have a meal and Kaffee und Kuchen (coffee and cake - Saxons are also known as "Coffee-Saxons").
Please note that the museum are in two buildings; the Zwinger and the castle. You buy a ticket for the building and can visit all museums in this building (except the historical Green Vault). In case of the Zwinger it's the Porcelain Collection, the Old Masters (partly closed right now AFAIK) and the Mathematical and Physical Cabinet, in case of the castle the (redesigned) Armory with the Turkish Chamber and both Green Vaults.
And for something completely different: take the tram to the "Blue Wonder" bridge at Schillerplatz. This is the nicest suburb of Dresden, with everything from technical marvels (bridge, a suspension and a funicular railway) and posh villas and castles to wineries and beer gardens. In the 1930s this was the most expensive neighbourhood of Europe.
I personally found the Mathematics and Physical Cabinet to be the most interesting, followed probably by the armour collection in the Schloss. But each to his own.
If you decide on more time in the city, two good daytrips are to the Jagdschloss Moritzburg and the well-preserved town of Meißen.