Palenque refers to two different things: first of all, the important Mayan ruins located in the southern Mexico state of Chiapas, and to a small town of the same name about six kilometers away from the ruins. Many travelers come to visit Palenque, and some of them choose to stay in the town, which has some limited (but improving) tourist facilities.
Most people come for the ruins, and they are indeed spectacular, but there is more to do in the Palenque area. Several outfitters offer horseback tours, and you can visit the picturesque waterfalls of Agua Azul and Misol-Ha. If you enjoy camping, it is possible in the region. Palenque National Park is quite beautiful and worth a visit: there are many species of birds and animals there, and the rare fortunate visitor can even hope to spot a jaguar!