Make sure to check out the craft market on Market Street.
Unfortunately, we got there on our first day in San Fran just as everyone was packing up. We did come back the next day, and were really pleasantly surprised with the quality of art and crafts offered. One would think, since Market Street is chuck full of tourists, that the only thing you would find would be $5 sunglasses from China. Fortunately, San Fran city fathers and mothers are staying true to their city, and only local artisans and artists are allowed to get permits to sell on the street.
Hooray for San Francisco!