[BretWeir]

Manteo is good -- cute, romantic type town with lots of shops and restaurants. But it's not on the beach. If you want to be right on the beach, it's mostly all house rentals; not too many hotel/bed-and-breakfast options. There might be some on Okracoke, which is pretty tiny, so you're close to the water wherever you are. The Sanderling Inn in Duck is supposed to be very classy; I've never stayed there, and it's more of a resort than a bed-and-breakfast.

As for activities, you can rent a 4x4 north of Corolla and ride it in the dunes. The area is closed to cars and you can see wild horses on the island. There's also hang-gliding off the dunes, kayaking, horseback riding and usual water activities (jet skis, etc.) on the bay side.