Kihei is near Wailea (expensive resort area with awesome beaches and some clubs in hotels) and the 2 major cities Kahului and Wailea. Kihei has fun beaches for relaxing (the Kams, especially Kama'ole 3).
Kahului and Wailea. There's not much to do in city for tourists. There's the big mall, a Costco, and Hawai'i's only KrispyKreme.
Lahaina will be HOT. There's a bunch of places to stay in West Maui, but there's only a couple of areas in Lahaina itself. Lahaina has a lot of touristy things to do though, so it's a great place to go hang out.
Ka'anapali is the other big resort area. It has a really long beach. Black Rock is also there. People climb up and jump off of it. There's great scuba diving and snorkeling off of Black Rock. Again, I think there are clubs in the hotels at Ka'anapali, based on what my friends say when they go clubbing.
Kahana: more condos than resorts, and it tends to be more low key than Ka'anapali, and you can probably get good deals for places to stay and then drive to other parts of the island.
Napili: Awesome. I love Napili, and I used to live there before moving to the less touristy part of Maui. It's close to Kapalua and about a 15 min drive to Lahaina, 10 to Ka'anapali.
Kapalua: Where some big pro golf thing is played every year. World class golf courses, the Ritz Carlton's just been renovated. All together, very pretty, but expensive. Nice beaches there too. There's a nice dive/snorkeling area called Honolua that's just past it.
There are some hostels on Maui, but they're in sketchy areas not near beaches.
DEFINITELY rent a car. There's some weird bus service/trolley thing that just started within the last 2 years, but that doesn't go everywhere. The only other public transportation is taxis.
DO NOT do the bike down Haleakala. Those companies were suspended for a year Oct 2007-2008 due to 12 deaths in 1 year. Every other day, someone ends up in Maui Memorial Medical Center's ER, and you don't want to go there.
The drive to Hana is pretty, but once you get to Hana, there's just a beach with a burger shack. It's not really worth it. The prettier drive, and sometimes even scarier than going to Hana is the drive around the West side from Wailuku to Kapalua, not around the Pali. I used to live on the way to the road to Hana, and I could drive it in 1.5 hours, and it still wasn't worth it.
From what I heard when I was home last summer, lots of the big hotels weren't filling and even had some wings closed off because of the lack of visitors, and they were having great deals.
Edit:
For other stuff to do, there are boat tours to other islands. Trilogy is probably the best one. I've been on many of them, but my family has been going on Trilogy since 1986. They do a tour along the Maui coast, go to Lana'i, and Molokini.
Restaurants
Kimo's: has some of my favorite fish in the world. It's on Front Street in Lahaina.
There's a lot of really good local food restaurants too, but most of them are either in Kahului, Wailuku, and Kihei.
Haleakala is a great place to visit. Take a sweatshirt. Its summit is 10,0023' above sea level, and it gets cold. There's a bunch of hikes up there too. You can camp in the crater if you really want, but I haven't done it for a while, so I don't know how to go about getting permission. There is no food in the park, so if you go up for the day, you might want to take food with you. There's grocery stores on the way up that sell sandwiches.