fabulosity - Wufenpu has clothes lang... a lot of it. I think wholesale is 6 pieces up... this is where night market sellers buy their goods. Shilin vs Ximending... hmmm --- Shilin is bigger and targets tourists; lot's of shops to buy souvenir shirts/keychains, food pasalubongs, etc. apart from the usual (clothes, cosmetics, food). Ximending has a younger crowd (high school to uni students) and more for "uso" stuff like you can find the Korean cosmetics shops tabi-tabi.
Must buy --- hmmm, Taiwan makes good Pineapple cakes. I've also seen people lining up for Wang Shifu mooncakes. Oolong tea. Mochi (esp. from Jiufen). Pork floss.
Must eat/try food/resto -- Stinky tofu, esp. the deep fried one (臭豆腐), Beef noodle soup (牛肉麵), Spring onion pancake (蔥油餅) or any breakfast item, lumpia ice cream (don't know what it's called). Most famous resto is probably Ding Tai Fung (
www.dintaifung.com.tw) and check out the 'strongly recommends' in this famous blog:
http://hungryintaipei.blogspot.tw/ (maybe you can find themed restos there... I'm not very familiar with those...)
Japanese products --- expensive... converted plus patong usually. But maraming fake na mura

Haven't been to Japan so can't compare... but Taiwanese people are very nice and helpful in general.