I was in Istanbul on business a few months ago and had to purchase the visa upon landing at the airport. It was essentially a non-event as you just stood in line (with the majority of your fellow air-travelers) and plunked down your passport and cash. If I remember correctly, the cost was $30-40.
As for sightseeing, Turkey is an historical and archeological treasure trove...seeing the Hagia Sophia and Blue Mosque are must-do's. Of course, there's also Topkapi Palace and numerous other sites as well. Don't know how long your stay is, but if possible, try to sample some of Istanbul's nightlife and restaurants. All-in-all a great place to visit.