This weekend, head to Palo Alto for its annual Festival of the Arts. It's free and outdoors, and has lots to keep you busy:
-kids art/craft area
-wine/beer for you
-3 entertainment stages
-300 craft booths
-Italian street painting (with 70 chalk artists creating masterpieces)
The fun happens on Saturday-Sunday, August 22-23 on University Ave (from 10-6). Take Caltrain there! It's the Palo Alto stop.