Panchgani is about a 6 hr drive from Mumbai and about 2 hrs from Pune. From Mumbai its best to take the turn off the Goa highway for a superbly scenic drive. Even before you enter main Panchgani, dont miss stopping at Harrisons folly which is reportedly named so due to the number of houses that the Harrison family tried to build at this spot over generations...that flew off over the edge due to the angle of slope and strong winds! At last count apparently this number moved to 13 houses!!
Panchgani is short drive away from Mahabaleshwar (20 kms approx.) but far more peaceful being the smaller hillstation of the two. Gorge on strawberries and bring back all kinds of strawberry preserves from Malas and Mapro. You could drive to Mahabaleshwar for some awesome strawberries with fresh cream.
You must not miss Sherbag, especially if you have kids around. Its an absolutely beautiful garden that takes about 90 mins to walk through leisurely. Kiddies can enjoy at the tree houses and hammocks that are liberally strewn around. Food served could be better, but doesnt suffer from want of choice.
The other Panchgani tourist attraction is tabletop land that gives Panch-angan (threshold)-i its name. Its is a clutch of 5 flat hilltops that purportedly was visited by the Pandavs and still bear their footprints as evidence. A horseback ride or in a tonga takes you across the largest tabletop with a diameter of about 4.5 kms.
Plenty of places to stay in. My personal recommendation is the Hotel Ravine located just as you enter Panchgani with its own pool (including a baby pool), play area for children with small huts and hammocks, as well as a tennis court. It also boasts a mini movie theatre and a nautilius gym that is open from 6 am - 11 pm. The restaurant offers an awesome view as do most of the rooms.