We did basically as Carl suggested for the first part.
Walked along the shore through the shops and village. Nice place. Took the cable car up. Nice view. Think it was 11 Euros each. They do take visa there. Didn't go through the gardens as it was really over priced IMO and couldn't justify the cost and time our of our day. For me, once you have seen a garden or a zoo (for example) there isn't much out of going to another unless you are killing time and have nothing better to do or if it is reallyinexpensive. This didn't apply for us here.
We did take the toboggan ride down and we do recommend it. Make sure to have euros not dollars. I had forgotten to get some euros before going up and they wouldn't take dollars. It was 15 euros each. Luckily someone else we knew from the cruise ship had enough for us.
The ride was not what we expected but still kind of cool and worth the experience.
They put you in a basket with wooden skids on it and 2 men push you down the hill and ride on the back and stear. It is mostly really slow speed and they have to actually pull you for a good portion of the trip. Lol. Not what we had pictured. A little touristy but just have to try it....
We took the cab ride back down. Cabbie wanted 20 euro. I offered $20 and he said "No! $30". I said $25 is more than fair and he wouldn't accept. I ended up giving him $30 but told him that was robbery and that he needed to look up the exchange rate. Oh well.
Back down in the village we took a local bus up to the cliff/overlook at Cabo Girao.
It was only like 6 or 7 euros each, round trip. Bus comes back by in about an hour for the ride back down. Make sure you understand the bus schedule. It isn't hard. Think it was #7 bus. About 30-40 minute trip up but well worth it.. The views on the ride are fantastic. Great experience as it goes through so many local neighborhoods and villages on the way.
At the top, the views and the overlook (with a glass floor and view down to the shore 500 meters below and of the island/city ) is awesome. This is a must do.
After the trip back down we had enough time to get a couple beers in a local pub called O-Avo. Great place! Located on Rua da Praia between Largo de Praca and Largo dos Varadouros. 3 beers was only 6 euros and the owners were great. Cool bar. True local pub like we always look for.
Nice little island.