Hi Nat,
Well you're certainly in a good location. Across the road from the Museum and Exhibition Gardens, just down the road to the city (trams at the door) and the other way to Brunswick St/Johnston St area - great food area and good non-mainstream shopping area. If you're into live music its also the best place in town to be - heaps of pubs with original music on most nights of the week. I don't know anyone who has stayed at the Nunnery in years so couldn't comment on how good it is.
There are quite a few factory outlets in the Fitzroy/Collingwood area, so it could be worth investing in a factory outlet guide to Melbourne (I think there's one called Pamm's guide????) to snap up some great bargains. There's a Taking Shape (larger size women's clothes) outlet off Gipps St, heaps of shoe, regular clothes, bedding/home places around there. Another area worth a day trip for bargain hunting is Bridge Rd in Richmond (although these days there are more bargains to be had on Swan St than Bridge Rd due to the Bridge Rd shops now stocking more current season's things than cheap stuff from previous seasons. Also means there is a bigger range of stuff to choose from though - so there are positives!). My Size have a factory outlet on Church St (at the bottom of Bridge St) which sometimes is really great and sometimes really isn't!
I'm sure you'll have a great weekend regardless!
Ali.