Hi
I went to Dahab 4 years on the trot from 1998 onwards because i loved the place!!
Things may have changed since then. Dahab used to have a real hippy background so restaurants were a bit basic, ie you sat on rugs on the floor at little tables, and the food required that you needed a strong constitution

Dahab bay used to buzz at night, lots of locals trying to sell their wares, fires everywhere, lots of people mooching about. I have heard that they've paved the main drag now and smartened the place up a bit which may be a bit of a shame if it looses its laid back character.
Diving is good for beginners, many famous dive sites like Lighthouse reef, Eel garden, Islands. Also a few world famous slightly more advanced sites- Bells Blue hole (see the ducks link on another post but don't try it!) Canyon, both well worth a look if you can get your guide to take you.
Tips-
Most or all of your dives will be shore dives and you may be required to walk across reef tops to enter the water, i would reccomend a stout pair of dive boots. Also Dahab is a mecca for windsurfers as well as divers, so its windy! The sun beats down but you don't feel it because the wind cools you down, keep covered and wear sunscreen, the rashvests you mention are a good idea as most have an SPF of 50+. Also a windcheater might be useful for the evenings depending on the temps when you go.
Do try and get into the mountains at night, you used to be able to book a bedouin supper round a campfire. The night sky when you get out of the town is stunning!!
We also used to be able to book safari dives. We would load camels up with dive kit and provisions and head off down the coast to 'Gaber el bint' to camp for a couple of nights on the beach and dive your own private reef for a couple of days, great fun!! Not sure if you can still do this now though.
Hope this is of some help, enjoy your trip
Regards
M