Costas Papadopoulos, the proprietor of Daedalou Galerie, 11 Daedalou (between Fountain Sq. and Plateia Eleftheria; tel. 2810/346-353), has been offering his tasteful selection of traditional Cretan-Greek arts and crafts for several decades -- icons, jewelry, porcelain, silverware, pistols, and more. Some of it is truly old, and he'll tell you when it isn't.
Eleni Kastrinoyanni-Cretan Folk Art, 1 Eleftherias Square (opposite the Archaeological Museum; tel. 2810/226-186), is the premier store in Iraklion for some of the finest in embroidery, weavings, ceramics, and jewelry. The work is new but reflects traditional Cretan folk methods and motifs. Get out your credit card and go for something you'll enjoy for years to come.
For one of Crete's finest selections of antique and old Cretan textiles (rugs, spreads, coverlets, and more), along with some unusual pieces of jewelry, try Grimm's Handicrafts of Crete, 96 25th Avgusto (opposite the Venetian Loggia; tel. 2810/282-547). The finest objects are not cheap, but you get exactly what you pay for here; even the newer textiles can be stunning.
Stores that sell local agricultural products have sprung up all over Iraklion (as well as most of Crete!). Crete's olive oil -- among the finest in the world -- stands side by side with honey, wines and spirits, raisins, olives, herbs, and spices. One store is as good as the other.