Hong Kong MTR and city bus is very convenient, you can buy an Octopus Card and you'll get some discount when taking that. The best place to stay, I think it must be Tsim Sha Tsui or Mong Kok or somewhere in Kowloon, since it is easy to get to other part of Hong Kong and there are many shopping malls around these area. In Hong Kong, you shouldn't miss Disneyland, Ocean Park, the Peak, Stanley Market, Repulse Bay, Giant Buddha, Ngong Ping 360, and if you have time, one day tour to Macau is also a good choice.