Must See/Do:
U.S. Side - Cave of the Winds, Goat Island, 3 Sisters Islands, Maid of the Mist boat tour, Jet Boat Tours
Canadian Side - Journey Behind the Falls, Butterfly Conservatory, Floral Clock, Spanish Aero Car, White Water Walk, Hornblower boat tour, Jet Boat Tours (these last two are the same as the ones on the U.S. side - so you can pick which side depending on other activities)
Check online for the fireworks display - they shoot them over the American Falls, so the Canadian side is the best place to see them.
You will hear folks say "Niagara Falls is a waste of time", "all you need is 1/2 a day", "go to Niagara on the Lake instead", and so on. Don't buy into that. It's a great place, you just have to know what you're getting into. Clifton Hill on the Canadian side is a carnival midway - it's tacky, overpriced, etc., but it's alive and fun. The Islands on the U.S. side are very natural and relaxed - great place for a picnic or just to listen to the water. Spend at least 10 minutes looking out on the Horseshoe Falls watching the water flow over the edge - it will get to you guaranteed. It's crowded - there's a reason for that, just enjoy it.