There isn't much culture in Kuta - except for the club-scene (which we didn't really try) and the souvenirs stalls everywhere. One thing that caught our attention was bottle opener shaped like ... penis ... Yes. For some reason they think that all the tourists want to open their beers with wooden penises of various sizes. Somehow we managed to resist the temptation to buy one :) The true culture on Bali is in Ubud. It's a little town in the center, which is an excellent base for exploring the numerous temples and sites around Bali. It is also here where most of the traditional Bali dance performances are taking place.
Dances in Ubud. There are essentially 3 types of dances that you can see in Bali. The first is Kecak (the fire dance) and imho the best one. The whole performance is in dark, illuminated just by candles in the middle of the stage. There's no music, just guys "chanting" is a very special way. If you saw the movie Barraca by anny chance, you may remember it from there. As a final piece, they lit up a pile of coconut cores and then one dude danced in the burning ashes. All n all - this was by far the most entertaining of the performances. Then we went to see the other two dances (barong, legong). Barong is a tale about some princess, monkey, dragon ... very asian and not exactly easy to follow. Still, at least you can figure out who's who and what's (probably) going on. Legong is just various dances with girls wiggling their (cute) behinds and twisting arms. Both are supported by very monotonous ding-dong-ding music which will get on your nerves in 5 minutes :)
Temples - there are so many of them on Bali, it's not even funny. Each village has to have at least 3 - one facing mountains, one facing ocean and one in the middle (generally speaking). Then there are more if there're rich people in the village, etc. Every house also has a little (or big) shrine at their home to keep the spirits of their ancestors happy and where they put little food offerings every day (so that they don't die again of hunger I guess :). Anyway, we visited all the "must see" ones - Tanah Lot, Gunung Kawi, Tirta Empul and Gua Gaja. We also went to see the rice fields, which are quite impressive. I wonder what will happen once the young generation figures out that they don't want to work and live like their parents...
Finally I'd like to metion the houses. It was very confusing in the beginning as we were never sure whether we were entering a house or a temple. Honestly, they must spend incredible amount of time working on decorations, wood-carvings, statues, etc. Some of  the places we stayed at were like entering a palace. When you drive around the villages, you'll notice that every one specializes in some kind of crafts - some do stone statues, many do different wood-carvings, furniture, etc. All manual work and all very impressive. Now I understand why people go there shopping for furniture and then ship it back home.