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I couldnt tell you much about the nightlife, not up to date in that area ever since we had our baby, but as far as art goes there are heaps of little galleries around the Mitte/Prenzlauer Berg Area off Torstrasse.

You will also find lots of record shops around this area. There is one at the bottom end of Brunnenstrasse near Rosenthaler Platz and also a few on Kastanienallee around the corner.

Friedrichshain (former east/ lots of students) or Kreuzberg (former west/very alternative) are also young and lively areas with lots of bars and shops, they will likely have some good record shops too, but I don´t know the areas too well.

I also love the "Hamburger Bahnhof" Gallery for Contemporary Art, they always have special exhibitions on, but their regular display is also worth a look by itself.

There is also an Annie Leibovitz exhibiton at the Postfuhramt next to the gorgeous Synagogue on Oranienburger Strasse.

Anywhere is good to walk around really. So much history everywhere.
I´d concentrate on the former East, but I am sure the West has some nice areas too. Or there is of course the huge Tiergarten for peace and quiet.

Not sure who has the best french fries, but there is some strong competition for who makes the best Currywurst in Berlin. Some say Curry 36 on Mehringdamm in the West , some say Konopke at the Eberswalder Strasse train stop. There are heaps of choices in between really. I am sure you will try a few