Sonido! is a fantastic cafe on Gertrude Street (http://sonido.com.au/).
It's fabulous, the walls are covered with art and kitsch memorabilia and the soundtrack is cool. I was totally smitten, here's why.
A few doors down you'll find Love & Madness a riot of colour (http://www.amorylocura.com/).I like the mirrors but they also sell architectural antiques, furnishings and collectables.