The bar I always go to for generally buying and for a beer is Zappa's Bar, or Cafe42 as its now called. You go straight down Damrak, and take a right down the narrow alleyway (Oudebrugstreeg) directly across from The Grasshopper on the street to the left (you will see it its the green building). Zappa's bar is a cool place it was my first stoned experience in amsterdam and I've always gone back there, I reccomend a nice pre-rolled joint of ketama for starters, and well basiclly anything you buy there is good quality. Like all Amsterdam its become quite expensive since the euro came in.
When you come out of there and you have the munchies the little MAOZ falafel shop right across from it is the best MAOZ in holland in my opinion, the only one that does "het heel smakelijk" mango curry sauce.

Also reccomend doing a shisha water pipe in one of the coffeeshops down Harlemmerstraat.

Don't worry too much about the street dealers, just keep your wits about you and avoid eye contact with them. They will at some point try to sell you "charlie" but just walk past them and ignore them, if you want you can say this- "Nay, Dank yi-vell." then they will think you are dutch and are less likely to give you any hassle. That means No thank you very much and its spelt how you would say it.

If you fancy a night out clubbing either Paradiso or Panama, you can smoke in there, but some of the other clubs don't like it. They have bands on there depends on the night so they could be sold out.

And if you fancy a really cultured Hollandse experience then come to Nijmegen.