Nobody arrives in Venice and sees the city for the first time. Depicted and described so often that its image has become part of the European collective consciousness, Venice can initially create the slightly anticlimactic feeling that everything looks exactly as it should. The water-lapped palaces along the Canal Grande are just as the brochure photographs made them out to be, Piazza San Marco does indeed look as perfect as a film set, and the panorama across the water from the Palazzo Ducale is precisely as Canaletto painted it. The sense of familiarity soon fades, however, as details of the scene begin to catch the attention - an ancient carving high on a wall, a boat being manoeuvred round an impossible corner, a tiny shop in a dilapidated building, a waterlogged basement. And the longer one looks, the stranger and more intriguing Venice becomes.

Founded fifteen hundred years ago on a cluster of mudflats in the centre of the lagoon, Venice rose to become Europe's main trading post between the West and the East, and at its height controlled an empire that spread north to the Dolomites and over the sea as far as Cyprus. As its wealth increased and its population grew, the fabric of the city grew ever more dense. Very few parts of the hundred or so islets that compose the historic centre are not built up, and very few of its closely knit streets bear no sign of the city's long lineage. Even in the most insignificant alleyway you might find fragments of a medieval building embedded in the wall of a house like fossil remains lodged in a cliff face.

The melancholic air of the place is in part a product of the discrepancy between the grandeur of its history and what the city has become. In the heyday of the Venetian Republic, some 200,000 people lived in Venice, not far short of three times its present population. Merchants from Germany, Greece, Turkey and a host of other countries maintained warehouses here; transactions in the banks and bazaars of the Rialto dictated the value of commodities all over the continent; in the dockyards of the Arsenale the workforce was so vast that a warship could be built and fitted out in a single day; and the Piazza San Marco was perpetually thronged with people here to set up business deals or report to the Republic's government. Nowadays it's no longer a living metropolis but rather the embodiment of a fabulous past, dependent for its survival largely on the people who come to marvel at its relics.

The monuments which draw the largest crowds are the Basilica di San Marco - the mausoleum of the city's patron saint - and the Palazzo Ducale - the home of the doge and all the governing councils. Certainly these are the most dramatic structures in the city: the first a mosaic-clad emblem of Venice's Byzantine origins, the second perhaps the finest of all secular Gothic buildings. Every parish rewards exploration, though - a roll-call of the churches worth visiting would feature over fifty names, and a list of the important paintings and sculptures they contain would be twice as long. Two of the distinctively Venetian institutions known as the Scuole retain some of the outstanding examples of Italian Renaissance art - the Scuola di San Rocco , with its dozens of pictures by Tintoretto, and the Scuola di San Giorgio degli Schiavoni , decorated with a gorgeous sequence by Carpaccio.

Although many of the city's treasures remain in the buildings for which they were created, a sizeable number have been removed to one or other of Venice's museums. The one that should not be missed is the Accademia , an assembly of Venetian painting that consists of virtually nothing but masterpieces; other prominent collections include the museum of eighteenth-century art in the Ca' Rezzonico and the Museo Correr , the civic museum of Venice - but again, a comprehensive list would fill a page.

Then, of course, there's the inexhaustible spectacle of the streets themselves, of the majestic and sometimes decrepit palaces, of the hemmed-in squares where much of the social life of the city is conducted, of the sunlit courtyards that suddenly open up at the end of an unpromising passageway. The cultural heritage preserved in the museums and churches is a source of endless fascination, but you should discard your itineraries for a day and just wander - the anonymous parts of Venice reveal as much of the city's essence as the highlighted attractions. Equally indispensible for a full understanding of Venice's way of life and development are expeditions to the northern and southern islands of the lagoon, where the incursions of the tourist industry are on the whole less obtrusive.

Venice's hinterland - the Veneto - is historically and economically one of Italy's most important regions. Its major cities - Padua , Vicenza and Verona - are all covered in the guide, along with many of the smaller towns located between the lagoon and the mountains to the north. Although rock-bottom hotel prices are rare in the affluent Veneto, the cost of accommodation on the mainland is appreciably lower than in Venice itself, and to get the most out of the less accessible sights of the Veneto it's definitely necessary to base yourself for a day or two somewhere other than Venice - perhaps in the northern town of Belluno or in the more central Castelfranco.

The historic centre of Venice is made up of 118 islands, most of which began life as a micro-community, each with a parish church or two, and a square for public meetings. Though many Venetians maintain a strong attachment to their particular part of the city, the autonomy of these parishes has been eroded since the days when traffic between them moved by water. Some 400 bridges now tie the islands together, forming an amalgamation that's divided into six large administrative districts known as sestieri, three on each side of the Canal Grande.

The sestiere of San Marco is the zone where the majority of the essential sights are clustered, and is accordingly the most expensive and most crowded district of the city. On the east it's bordered by Castello , and on the north by Cannaregio - both of which become more residential, and poorer and quieter, the further you go from San Marco. On the other bank the largest of the sestieri is Dorsoduro , which stretches from the fashionable quarter at the tip of the Canal Grande, south of the Accademia gallery, to the docks in the west. Santa Croce , named after a now demolished church, roughly follows the curve of the Canal Grande from Piazzale Roma to a point just short of the Rialto, where it joins the commercially most active of the districts on this bank - San Polo .

To the uninitiated, the boundaries of the sestieri can seem utterly perplexing, and they are of little use as a means of structuring a guide. So, although in most instances this guide uses the name of a sestiere to indicate broadly which zone of the city we're in, the boundaries of our sections have been chosen for their practicality and do not, except in the case of San Marco, follow the city's official divisions. Most of the sestiere of Santa Croce, for example, is covered in the San Polo section, with the remnant covered in Dorsoduro, as the sestiere has no focal point for the visitor and very few sights.