Manali is an excellent gateway to the Himalayas. It is snow-covered in the winter, and due to the altitude, summer temperatures hover around 20° C, when everything that lies further south suffocates in the heat. In short, people come here for relaxation, and the many hot springs fully contribute to that feeling.
Since it's nice and small in size, this place particularly lends itself to nice walks. Take advantage of it, Indian destinations that allow for this are few and far between. You can even relax at the edge of the Kullu, the river which runs through Manali, and watch the locals who come to bathe or gather water.
To get even more fresh air, I love to climb the Rohtang Pass, which sits at nearly 4000 m and offers a magnificent view of Manali and the surrounding valley. You can even sleep under the stars next to one of its lakes and gaze up at the mountains above the clouds.
Manali, for many backpacking travelers, is a place where people know when they arrive but don't know when they'll leave! There are many who would come for two or three days and spent several months here. The local smokable commodities help...
In fact, the city is very well-known for its high quality hashish, made in the neighboring mountains: the Manali Cream. Warning: it is very strong and strictly forbidden by law. The police don't play around with tourists about that.
During a stay in India, Manali is a nice stepping stone on the way to Ladhak, to rest for a few days in one of the many nice guesthouses before taking on the Himalayan mountain passes. It's also an important trekking base for hikers who are exploring the area.
We made camp in a little, wood panelled room, situated on a shop-lined street, close to the public baths in Vashisht. It'll take too long to tell you why, but whatever you do, you MUST come here. Get off the beaten track and head uphill, where you can cool down under a waterfall and bypass the valley, so as to reach Hidimba Devi Temple.
You should also make time to visit Old Manali with its souvenir shops. Added to this are all the sports that you can do in the area. All I can say is that Manali hides a trove of treasures that you'll find without having to look too far!!