We met some people visiting Mexico who swore that Isla Mujeres island has the best beach ever. Well, let's just say I'm sincerely sorry that these people haven't seen anything better than a small overcrowded beach that's limited by concrete and surrounded by ugly conveyor type hotels. The water is somewhat turquoise, but there are so many yachts and passenger boats parked by the island that the smell of petrol and the taste of petrol are predominant in the air and in the water. Same as the nearby Cancun - an artificial town built for package tourists and party people who don't mind spending tons of money on drinking - Isla Mujeres attracts a lot of certain type of visitors, but the vibe is a bit more rustic.
The island itself is tiny, about 10km in length, and the town has only about 4-5 main streets. You can find cheaper accommodation/hostels in the North end of it (about $20-25 per night in hotel Caracol or nearby Poc Na hostel on Matamoros street), and also some restaurants with decent prices if you walk around the center of the town (we liked Indian + Mexican and Israeli food on Hidalgo street, and a little pita wraps place on Guerrero, there's also a supermarket next to the basketball field, so if you get a kitchen in your hostel - it's a good alternative as well.
There are a lot of tours offered on the island. I'd recommend to avoid any tours that offer to take you snorkeling to the nearby reef - it's practically dead, you're more likely to see something amazing while snorkeling if you go for snorkeling tour in Mahahual or at least in Tulum.
What we highly recommend is swimming with whale sharks in the summer months. It's one of the most expensive things that we have ever done while traveling ($59 per person through Poc Na hostel), but it's absolutely worth it. They take you on a boat for about 1hr to the open sea where whale sharks come to feed every day, you get your snorkel and fins on and you just swim around hundreds of these huge magnificent creatures while they filter the water for plankton and small fish with their huge mouths. Truly unforgettable experience.
If you're into yoga - Poc Na offers $5 morning and evening classes which take place on an open sandy field under coconut trees - very relaxing. If you want to see the rest of the island - you can rent a golf cart (pretty cheesy and slow) or a lot more fun option - get a scooter (about $20 per day) There's not much you can go to, the Western side of the island is almost all private beaches and hotels. There is a sanctuary on the peninsula where they keep some sea turtles to breed and then they release the hatched little turtle babies into the sea - you can go there and see the adult turtles and the babies (if you're lucky, you can witness this baby turtles release ritual nearby Poc Na hostel) Unfortunately, the turtle eggs situation is really sad, and lots of them dont make it, especially if laid in the wild. We ourselves were offered to buy some caught baby turtles from a poacher right on the beach.
The Eastern side of the island is rocky, but has some nice secret beach spots. Thats when having a scooter is really cool - you can find your secret spot by cruising around, take some food with you and spend the entire day away from all the tourists.
All in all, this is not the place of our preference, but if you happen to be there make the most out of it.