Cowes: it pretty much consists of one main strip with pubs/restaurants/shops.
I have to give a special mention to an Italian restaurant there called, IIRC, Pino's. You HAVE to check it out, it's full of bike heroes memorabilia, signed photos of all the big MotoGP and SBK riders, present and past, plus of course great authentic Italian. The place gets absolutely packed on race weekends so get there early.
Also, there's a big pub (forgot the name) on the corner of the main strip where it ends, opposite the jetty near the water with an outside seating area at the back. It's a pretty basic affair, but again with memorabilia, plus pool tables.
The burnouts and general show-offs are usually near that pub and on the main strip near the water, although in recent years the police have curbed it a lot and barricaded it off as the whole thing was getting a little out of control sometimes (but hey, nothing like the madness on a Jerez Saturday night).
If you want to buy any merchandise, ther'e always a few, some of them temporary, team/rider merchandise shops that spring up during the big weekends, they can also be found on the main strip.
Favourite track spots: I'd say, if you have time and you're going the whole weekend anyway, walk the whole track at various sessions and check out each corner. Turn 1 (Doohan corner) is pretty special, the bikes come up from the long straight, then have to brake real sharp into turn 1 before going into the left-hand loop which is off-camber, and riders take different lines through there. Another great turn is Lukey Heights (turn 10) where the bikes run up a blind hill, then drop down from great heights before heading into the turn, it's almost like a mini version of Laguna Seca's corkscrew (but not quite, and going right rather than left. OK it's different

). Or stand at the Hay Shed point, at the back of the track, it offers great viewing too. Basically the whole track is paradise if you're into bikes
Personally I love the place, been there various times, it's a mixture of holiday feeling (Philip Island has lots of great beaches where families go in the summer to cool off), nature reserves with the famous fairy pinguins and other wildlife, plus the place oozes motorracing.
Hope this helps, let me know if you need any additional info.