If possible, go in June or September, even late May or early October, unless your goal is simply a sun-drenched beach: Crete has become an island on overload in July and August -- and it's very hot! The overnight ferry from Piraeus is still the purist's way to go, but the 50-minute flight by plane from the Athens airport gives you more time for activities. The island offers enough to do to fill up a week, if not a lifetime of visits. By flying, you could actually see the major sites in 2 packed days. To make full use of your time, you can fly into Iraklion and out of Chania, or vice versa.
We recommend the following destinations if you have 5 to 7 days. This mix of activities even allows you time to collapse on a beach at the end of the day. Iraklion is a must, with its archaeological museum and nearby Knossos. An excursion to Phaestos, its associated sites, and the caves at Matala can easily occupy most of day 2. If you don't need to see that second Minoan palace, I recommend you move on at the end of the first day to overnight in Chania or Rethymnon -- each or both can fill another day of strolling. Choose your route: The old road from Iraklion that winds through the mountains and villages has its charms, while the coastal expressway offers impressive vistas and a "tunnel" of flowering oleanders. If you set off in the morning, you could stay on the coastal highway to just before Rethymnon and take the side trip through the Amari Valley. Once in Chania, the walk through the famed Samaria Gorge requires 1 long day for the total excursion. Those seeking less strenuous activity might prefer a trip eastward to Ayios Nikolaos and its nearby attractions -- especially the many fine beaches between Iraklion and Ayios Nikolaos. Another alternative is a visit to the Lasithi Plain and the Dhiktaion Cave: This can be taken from either Iraklion or Ayios Nikolaos. Various other side trips are described in the appropriate places. Although public transportation or tour groups are possibilities, you should really rent a car (although not for use in the cities or towns!) so you can leave the overdeveloped tourist trail and explore countless villages, spectacular scenery, beaches at the ends of the roads, and lesser-known archaeological, historical, and cultural sites.
Site and Museum Hours Update -- If you visit Crete during the summer, check to see when major sites and museums are open. According to the tourist office, they should be open from 8am to 7:30pm, but some may close earlier in the day and all are usually closed 1 day a week.