With respect to Oaxaca, I would also recommend Monte Alban. Early morning light is beautiful in Oaxaca and actually made me want to shoot color, as mentioned above, even though I'm primarily interested in B&W.

I believe that the reaction that some get while travelling out of country (gastro-intestinal problems) is related not to unsanitary conditions but to the different bacterial flora that are common in different environs. I've travelled extensively and quite a few times around various parts of Mexico. My experience couldn't be farther from yours. I've always brushed my teeth with tap water, used ice, eaten fresh fruits and vegetables, drank many exciting drinks, teas, and fresh fruit blended drinks. Never a single problem! And i don't stay or eat in the places designed more for tourists, I tend to ask locals where they eat and look for places where I see locals eating, not the gringos. Anyway just my experience.

I've heard that some can have adverse reactions due to the different microorganisms, which we all have in our guts, but you should be fine after adjusting.

If you like to visit the beaches near Oaxaca I would recommend near Mazunte. Quite a precarious ride through the mountains on a second class bus, but the town is very small and not very touristy.

hope this helps!