Colonia is a beautiful town in western Uruguay, just across the river from Buenos Aires, so there are a lot of tourists who visit this slice of history. My aunt and I hopped on a bus from Tres Cruces right to the terminal in Colonia without any problem whatsoever. When we arrived at our destination, found the tourist office, grabbed a map, and started touring around.
Colonia del Sacramento, as it is officially called, was a Portuguese settlement as evidence by the old houses and cobblestone streets in the historic district. The streets are well preserved and very peaceful. Colonia was declared UNESCO heritage site in 1995 to keep it that way.
As with almost all Uruguayan towns (in general) I recommend you climb up the lighthouse to get a nice view of the whole city. Beside roaming the streets and checking out the museums there are also an abundance of great places to eat and shop for crafts. Colonia is great place to visit.