Marg and Gary,
Very much envy you.
Albufeira and that part of the coast is commercialised.. so if you want to see the real Algarve my recommendation would be to travel out east of Faro towards Tavirra and also inland into the hills. There is the Rio Formosa nature reserve and Tavirra is relatively undeveloped. I have heard good things about the coast west of Albufeira but have not been out that way myself.
I have put up a page at http://www.amercer.freeserve.co.uk/alg1.htm about an inland itinerary we followed and very much enjoyed in the area. There is a Roman villa at Estoi and a magnifiicent crumbling palace. I would be happy to add your recommendations to this page ? Also, if you follow the Casa link you will find some more good info for the area.
Our favourite restaurant was Cinderellas in Faro...if you get there try the Sole cooked with Banana's and the Cataplana, which is a sea food casserole. also the Tuna steaks.....hmmmm. It has a mix of locals and tourists....generally a good sign. They served a great burger as well. Teras del Rei (I think thats what is called ) is a superb local red wine but we liked many of the local wines including the Vino Verte (Green wine).
Have a great time, Andrew Mercer