I think the best way to see NYC is by foot. I'd walk from Penn Station south toward Chinatown if everyone can handle it. You'll pass Chelsea, Soho, Greenwich Village, Little Italy and Chinatown. You can go as far as the South Street Seaport but now we are talking a full day. It'll probably be about 3-4 miles, but you won't know it because you will be stopping, shopping and eating. I'd start at Broadway, around 34th Street, head south and just go until you can't walk anymore, or until you hit the Statue of Liberty
Or, you can always head north up Broadway and take a look at Rockefeller Center, Central Park and of course Times Square and all the wonderful things in the Times Square area.
Here's some information if you are interested in that kind of journey:
Mark's New York Broadway Walking Tour
Can I come?