VillageFest is a hugely popular event that takes place every Thursday from 6pm-10pm during high season and 7pm-10pm during the hot months. Since it's so popular, expect crowds! It is busiest during March, when it is so crowded that walking a block can take forever. Other times of the year, it's usually busy, but not overwhelmingly so.
The restaurants tend to be very, very busy this night - so don't expect to get a table right away. But, it's a great time to scope out the restaurants and decide which one to try another night. There are many food choices on the street anyway: from corn-on-the-cob, hotdogs, kettle corn to falafels, Greek pastry, tamales and crepes. At the north end of Villagefest, the organizers have set up tables and chairs to make it easier to eat. Otherwise, grab a piece of curb and people watch while you eat!
As far as the merchandise goes, you can find a wide range of things: jewelry (including vintage), photography, dog clothes, pottery, paintings, coffee, raw honey, fresh and dried fruit, handmade soaps, etc. I have bought many, many gifts here over the years. It is mostly unique, handmade stuff. There is always live music too.
Definitely worth a visit when you're in the Palm Springs area!