Nearly all of Granada's attractions are located within a small area near Parque Central. At a brisk pace, you could cover them all in a day. If you're pressed for time, definitely don't miss the Cathedral and the sunset atop Iglesia la Merced. Granada's a very pleasant city to stroll, and covering the attractions on foot is a great way to enjoy the historic center.
Granada has several tour operators clustered around Parque Central. The trips they offer are generally quite uniform (volcano tours, city tours, Las Isletas), but their prices are not so shop around. Some sell airline tickets and offer car rentals as well, but these services can be tough to find. Try and avoid paying for trips in advance if you can - many operators in Granada (as well as elsewhere) stop caring about you once they've got your money.
Michael Karanicolas is awesome.