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Bangkok's Ko Rattanakosin, or the old quarter, is an artificial island created by Khlong Ong Ang, Khlong Banglamphu and the Chao Phraya River. You'd barely know you were on an island however as the waterways -- barring the river, of course -- just blend into the surrounds. One point that makes the area distinguishable from the rest of the city however is the lack of skyscrapers: In deference to the royal palace located in the quarter, no brass and glass monstrosities have been built here.
Most of Bangkok's major historical sites of interest are located within the confines of Ko Rattanakosin, including Wat Phra Kaew, the Grand Palace, Wat Pho and Sanam Luang, making it a fascinating area to just wander around. Given its relatively compact size, too, it is ideal for walking tours -- it's just a shame about the heat. Seriously, start early, rest in the middle, and finish late, which is really the mantra for all of Bangkok.
Remember to always dress appropriately for temples as you never know when you will pass somewhere worth popping into. This basically means covering your shoulders and wearing shoes with a backstrap (that's the technical rule, which in layperson's terms means: No flip flops).
It doesn't have to be all history and seriousness. Wat Pho has an excellent massage school and they're always looking for daring subjects, though there's a fee because they're so darn good.
If you're staying in the Khao San Road area (which is, technically speaking, on Ko Rattanakosin) then you're within short walking distance of all these sights and more. From elsewhere in Bangkok however you can easily visit the area by boat, coming up the Chao Phraya on the Chao Phraya River Express and alighting at the Grand Palace.
People often choose to visit the area as a part of a longtail tour which also takes in the back canals of Thonburi, but prices are inflated, so if you opt for this, bargain with a smile but very hard.
A word of warning: The historic sights in this part of Bangkok, especially the immediate area around Wat Pho and the Grand Palace, are fertile preying grounds for touts and conmen. Keep your wits about you and ignore any strangers who approach talking some guff about this or that being closed for a special religious holiday. All they want to do is fleece you at a fake gem store. And we have told you not to buy gems in Bangkok, right?