As previously stated, Cuba rules.
Since you're doing the backpacking thing, here are a few tips based on my own backpacking/hostel experience.
1. Do not go to Varadero. Varadero sucks. All it is is a beach.
2. Allow people to approach you. They will be looking for your money, however, they will also know where to get decent food. If you can afford it, let someone take advantage of you for a couple days while you take advantage of them. You will be paying for all their meals, but the food will be worth it. And probably dirt cheap anyway.
If they invite you to their home, go. You'll get to see how they live (unimaginably poor) and will maybe get to do some awesome things. I got to experience a street-party in old havana where a guy was playing salsa music out of a discman attached to two crappy speakers and was serving malt-liquor out of a barrel. 2 bucks for a litre of the stuff. The next night the mother of the family asked if I'd be willing to buy them dinner. I said of course and she took ten bucks (ten bucks!) from me and bought enough chicken and rice to feed the entire "apartment block" - really, one big old colonial building that probably once housed a single family and was then home to about thirty people.
3. If you're arriving in a town and don't have a place to stay planned, don't worry about finding one. If you're wearing a backpack, you'll get approached as soon as you walk off the bus. Probably by more than one person, these people will be more than happy to take you somewhere to stay. Usually, they're getting a cut from whoever they are bringing you to.
4. The Ultimate Cigar-Acquisition Tip.
If, like me, you are not a huge cigar fan, but would kind of like to have some cigars to smoke while you're in Cuba, here's how to get guaranteed genuine cigars for as cheap as possible.
Go on a cigar-factory tour. Go at a very busy time on a very busy day. Hang well at the back of the group. At one point on the tour, you'll be on the factory floor, in a room that feels like a classroom. You'll be surrounded by people at desks rolling unlabeled cigars. As soon as the tour guide finishes his/her spiel and starts off to the next part of the tour, turn to whichever worker you're standing beside and quietly make an offer for whatever they have on their desk. I paid $20 US for a handful of about a dozen and a half cigars.
The issues with this method are that you don't know what you're getting, and there may be some guilt around exposing a local to possible repercussions.
If you care about your cigars and want to know what you're getting, just buy from the store at the factory.
5. If possible, check out a baseball game. They play really, really high-level ball in Cuba. I saw Havana Industriales play some other team in the huge stadium in Havana. Place probably seats 40 000+. I think there were about 900 people there to see the game. We sat third row, right up from 1st base. It was freaking awesome.
Have a blast down there, man!
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