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Södermalm is Stockholm's largest island and the neighbourhood with the strongest independent character. The northern cliffs along Söder Mälarstrand offer some of the finest panoramic views in the city - Monteliusvägen, a 500-metre clifftop walking path, looks directly across the water to Gamla Stan, Stockholm City Hall (Stadshuset), and Riddarholmen church. Fjällgatan, on the eastern side, provides an equally dramatic outlook across the harbour to Djurgården. Both are free and accessible at any hour.
Away from the viewpoints, Södermalm functions as Stockholm's creative district. SoFo (South of Folkungagatan) concentrates independent boutiques, vintage shops, record stores, and cafes - it is the area most Stockholmers would recommend for a lazy afternoon of browsing. Götgatan is the main commercial artery, but the streets east and west of it have more personality. Nytorget square is the de facto living room of the neighbourhood, surrounded by cafe terraces that fill up from morning to evening in warmer months.
Pro Tip: Walk the Monteliusvägen path at golden hour (around 21:00 in midsummer, 15:30 in winter) for the best light over Gamla Stan. Sit on the benches along the path - it is one of Stockholm's finest free experiences.