Ceuta  is one of two Spanish exclaves in North Africa. The territory has had several rulers before the Portuguese in 1415 took control of this city east of Tangier. Since 1580 it is under Spanish administration but holds status of an autonomous city. The city is located on the African continent.
This exclave was in the spotlight in 2005 together with Melilla because hundreds of people were trying to climb over the border fence. Ceuta being part of Spain and therefore a safe haven for Africans made it a prime target for migrants. Today the border is heavily protected by the Guardia Civil. The European Union invested a lot of money to make illegal immigration more difficult.
Ceuta is easily accessible from Algeciras (Cádiz) by ferry. High speed ferry services run between Ceuta and mainland Spain every half hour as of summer 2007. Cruise ships occasionally visit, and usually dock within a few blocks of the easily-walked downtown area.
From land Ceuta is only accessible from Morocco. If arriving by bus, you may have to take a bus to a nearby town and then a grand taxi to the border. For example, coming from the south, the closest an intercity bus will take you is to Fnideq. From there, take a grand taxi to the border (4dh). It is much easier to go to Ceuta from Tetouan than from Tanger, as most busses from Tanger go through Tetouan anyways before heading north to Fnideq.
You will need a passport to cross the border with Morocco in either direction and official ID to book passage between Ceuta and mainland Spain. Rules for immigration are the same as for Spain. Leaving and coming to Morroco, people will try to sell you the entry/exit forms you need and fill it out for you. Don't buy them as they are available for free at the Passport windows.
Cruise ships do visit, but only very occasionally.
Ceuta is a tiny city. Best way is by bike or on foot. The area near the waterfront and shopping area is nicely landscaped and attractive considering the heavy traffic supported.
There are taxis available. Make sure they use the meter or negotiate a price before you get in. There is a decent bus service with modern and spacious buses running around the city with stops at the border with Morocco. Look for a bus marked "Frontera".
The area hosts a few churches, and fortifications for those interested in Euro-African history and governmental relations. The downtown area and waterfront is remarkably clean and attractive with safe walking, and offers many stores and cafes serving the shoppers noted earlier.
There is a semi interesting fort in town with some views. There is also a lighthouse to see. Other than that are lovely beaches and desert areas to explore.
Ceuta is a free port, this means there are few or no taxes on goods. You will see that the economy of this city focus on people transiting to/from Morocco and one-day shopping tourists. Offerings range from sidewalk hawkers and kiosks, to modest stores (with goods you'd expect from the types of visitors noted above), to fine jewelers and an El Corte Ingles department store.
Offerings downtown range from sidewalk cafes and a "Mc Auto" McDonalds to a few fine restaurants.
Ceuta is a great city to go out. There are several pubs and clubs and a great tapas route.
Try Ceuta Parador Ceuta
There are a few hostels/pensions with a big CH sign on the wall in the center on or close to the pedestrian street. Prices start around 20€ per night