Malta/gozo

Valetta is the capital of Malta and yes, it is a "walking" city. There is much of historical interest in Malta and a good bus system to take you all over the island. I found the food less than impressive but "one man's meat etc., etc." We visited Gozo only briefly so can't really tell you anything useful. The Lonely Planet guide book for Malta is very good. Have a look at it before you decide to go. If you are a beach person, there are lots.

I've been to Malta twice. Both times, I found it very interesting. However- if you have not toured other spots in Europe, I would delay Malta.

Again, this is just my opinion, but there are better beaches, better historic sights, and better atmosphere elsewhere. That said, if you have a specific reason to go to Malta, there are nice villages, Valletta has good museums, city attractions, and there are the Neolithic tombs as well outside the city. I found Mdina pretty interesting. It was more expensive on my second visit because they were on the Euro rather than the old Lira.

The islands are small, so really, a few days would suffice.

Personally though, I would look at Croatia as a substitute. Lots more to see, more variety of sights, fantastic food, and pretty inexpensive still.