Location and orientation:
The main street into town, Chemaul, intersects with another main street just before the malecon [definition: the street that runs along the shore; where to go to get pestered by hawkers of silver, sombreros, sunglasses and mariachi[. Along the two main streets you can find all the food, groceries, fish tacos, trashy t-shirts, sleezy men, and beer you could desire, as well as a tattoo/hairdressers/piercing/waxing/manicure shop, and a monument for the town's 86th anniversary.
Off the main street live people. Real ones. Mexicans, even. Don't worry, you will have no need to ever leave the American-friendly streets and actually venture into Mexico.
Other landmarks include the lighthouse to the north of town, the beach along the eastern edge, and the sand dunes at the southern edge of the town. Getting around on foot is easy, yet no American will do such a thing (refer to "activities" below).
Activities:
Drinking tops the list. Tecate, Tecate Light, and tequila are the only options. Whichever beverage one chooses to consume, copious quantities must be quaffed, preferably beginning before or around 10am, and continuing to 10pm, at least five days a week. [Author's note: the margaritas at Vaquitas are reallllly strong.]
Other activites include sailing around the bay, riding quads or dune buggies on the dunes or to the bar, attending happy hours, sunbathing, gossiping, complaining about minor inconveniences, slandering the Mexicans, BBQ-ing, and fishing. Be aware that all of these seemingly easy tasks are complicated by the fact that every activity must be completed with an alcoholic drink in hand. It's like Beer Kickball, except it's Beer Life.
Food:
The fish tacos in San Felipe are famous, and rightly so. The pizza at Fat Boy's is excellent, though expensive. It is worth noting that Fat Boy's serves free breakfast on the weekends if you order an alcoholic drink with your meal. The best food in town can be found at Marilyn's, but the location is confidential unless she picks you up at a bar ;-)
Language:
Mexicans speak Spanish and some English, and occasionally a fascinating Spanglish that can be entertaining for hours. American speak English, and absolutely no Spanish, and most never learn how to properly pronounce such common Spanish words as "chile relleno" or "gracias".
Information:
If you require or desire the internet, there's a free wifi connection from the Langosta Roja that, conveniently, can be picked up by laptops at Fat Boy's. However, smartphones cannot receive this signal, for whatever reason. The other option is wifi from La Taza Gourmet, a coffee shop on the main drag; just buy an iced coffee and you get the code. They also have computers for use for $1.25/hour.
For more local concerns, talk to local people. Want to know where to get the best shrimp tacos? Where to buy Velcro? Which bar to go to on what night? Just ask.
Out of town:
First, try to befriend someone with a dune buggy. There are miles upon miles of back roads between San Felipe and the mountains to explore in a buggy. Canyons, cacti, crystals and clouds are all on display.
Another fun day trip is to drive south to the little seaside town of Puertocitos. To enjoy the hotsprings, time your arrival for the ebb tide. Access to the area of the town with the springs costs $5 a head. This means even sitting on the beach and enjoying your own picnic lunch will cost you. Again, the key is to befriend people. The gringo locals are extremely frindly, and, I think, a bit bored. If one invites you into the neighborhood, you no longer have to pay. And they'll ply you with drinks and dinner to make you stay longer. Accept.
People:
The saving grace of San Felipe: the gringo locals are lovely people with open hearts and minds. Many of them are generous to a fault. If a traveler makes the effort to strike up a conversation with with such locals, the rewards are immense, friendship being chief among them.
They are slightly odd people, there's no denying it. The people who end up in San Felipe to live out their days are the ones who were the "run away to Mexico" types to begin with. Tattoos, piercings, long hair on the men, daisy dukes on the women, cigarettes, and bad grammar abound. An unfortunate trait of nearly all gringo resedents of San Felipe is the beer belly. Refer to the "activities" section.
The Mexican locals in San Felipe are also lovely people. However, after decades of seeing only the types of Americans who are drunk all the time, I think they are rather jaded towards their neighbors to the north, and rightly so. For the most part, Americans are a source of income to be tolerated.
But no matter how one slices it, the people of San Felipe are who make the town a special places. Without them, it's just another bar crawl. With them, it's a small slice of paradise.
[Thank you Marilyn and JC!]