Rio is great - Christ the Redeemer, Sugar Loaf, Santa Tereza at night, The Maracana, Copa Cabana, Ipanema and Le Blanc. There's so much to do at night, I wouldn't even know where to start. You could kill a week there, but I'd say after a couple nights on the Copa Cabana or Santa Efigenia you might want to rent a car or take a bus down South a bit.
I couldn't agree more about Ilha Grande and the general area there. It's absolutely amazing, a nature reserve and you will see amazing wildlife there. There's a floating bar a beach over (on your way to one of the top beaches in SA) - when we were there there was even a turtle swimming around it. A lot of the land facing beaches have no real current, and so you can just chill in the water - and let the little fish come up and swim around your feet
The restaurants can be a little pricey, so be careful of that - especially if you are on a boat tour and you are basically a prison there at lunchtime. I wouldn't say it was the safest place on Earth, but it's safer than most of Brazil for sure.
The lakes "lagos" - blue and green I think, as amazing. You can jump off the little speed boat you can get on (about 30-40 pounds for the day trip) and swim in a SWARM of multi-coloured fish - I think that's the green lake.
Angra do Reis is also very beautiful, and just next door - though I've never been people say it is a similar level to Ilha Grande.
I don't really like Sao Paulo, the city, and I don't know any foreigners that really do either. The shopping there is pretty crappy, and overpriced, compared to the UK / US - and it's not exactly a cultural paradise.
Foz de Iguacu is pretty cool tho, there are a few set things you can do, so I don't think you can really go wrong there. Just make sure you take your passport on the trips which need to cross over to see the Brazilian side.
You can head up to Salvador - the small party-island of Morro do Sao Paulo (not anywhere near the state Sao Paulo) is amazing - and there are lots of cultural things to do, and night life / beaches.
Other notable places are Natal, Porto Seguro and the general Bahia coast, Vitoria ( it's a city, but it's pleasant and the state has amazing beach towns even if they don't rival Bahia in the main), Fernanda de Noronha is supposed to be an amazing island reserve as well, if you are heading down south you have Florianópolis, Caldas Novas for the hot springs and water parks - the list really does go on and on.
It really all depends on what you want from your holiday though, there is a lot of choice!
I've done most of the stuff on that list, and I'd say they are all worth doing. Some people do love Rio, but I prefer it for a few days at a time myself unless I'm just gonna sit by the beach all day with an unlimited budget.