Where to stay in South Beach

South Beach is a very long, narrow island along the coast. When visiting Miami you really should stay in South Beach. It's not cheap, but driving to and from the island can take a long time in heavy traffic.
In general in the US transportation is by car, but in Miami South Beach you can walk to most places. But keep the size of the island in mind, the total length is about 15km.
Ideally stay somewhere near the beach between 12th and 17th Street (map) . Then you are near Lincoln Road Mall, the shopping street / outdoor mall. It has many shops, terraces and restaurants. The gay clubs are nearby, the gay beach is at 12th Street.