Pushkar is a small lakeside town (pop. 15,000) in the Indian state of Rajasthan. According to Hindu theology, Lake Pushkar was formed when a lotus blossom (pushkara) fell from the hand of Brahma. Pushkar's consequent status as a holy city makes it one of the five principal destinations of Hindu pilgrims. The lake boasts 52 holy ghats, many of which have special religious or historical significance Vishnu is said to have appeared at the Varah Ghat in the form of a boar, and a portion of Mahatma Gandhi's ashes were submerged at Gau Ghat and the city itself is home to hundreds of Hindu temples large and small. Most significantly, Pushkar is the site of the only temple in India sacred to Brahma, who despite his role as Creator of the Universe does not figure prominently in modern Hindu practice.
Pushkar is a sedate town for most of the year, but for 12 days in the month of Kartik (around the full moon closest to November 1st) the desert just outside Pushkar is transformed by the annual Pushkar Camel Fair. 50,000 camels and 200,000 pilgrims, livestock-traders, and tourists congregate to worship, make merry, and trade (or even race) camels and other livestock.
Pushkar is by no means off the beaten track, so backpackers disgusted by foreigners-only hotels, banana pancakes, and other tourist-targeted crap won't find much of interest here. That said, Pushkar is a quiet and hospitable town ideal for backpackers needing to recuperate from the bustle of nearby Jaipur but unwilling to do away with Western amenities.
Pushkar is a holy city, and smoking, drinking, and substance-ingestion are frowned upon. Boorish foreigners, as always, manage to get their own way in that regard, but one concession to local custom that you will be expected to make is to perform puja at Pushkar Lake. This is one of the few potential hassles of this otherwise laid-back burg; until you make puja, you are likely to be accosted constantly by Brahmin priests and their minions.
Making puja involves going down with the priest to the lake and making a series of sacred offerings. You will be expected to make a monetary donation. This is many priests' primary means of support, and some can be quite unscrupulous about milking you for money; the priest with whom I made puja even modified the ceremony so as to collect multiple installments of cash. Don't be snookered; you should make your donation at the beginning of the ceremony and make it clear, politely but firmly, that no more cash will be forthcoming. Most Indian pilgrims will give in the range of Rs. 11-101 (the extra rupee is for good luck), although as a comparatively wealthy foreigner you may feel obligated to give more. At the end of the ceremony you will be given a bracelet of red and yellow strings (in backpacker parlance, a Pushkar Passport) to tie around your wrist; once you have this, you can walk the streets of Pushkar unmolested.
Even if the priest that is administering the ceremony is especially mercenary, try to keep a sense of humor about it. Remember, unlike many things in India, this is not a scam to separate tourists from their wealth; puja is a bona fide sacred ceremony that has the unfortunate potential to be warped by greed. Don't let yourself be taken advantage of and give only what you feel comfortable with, but be respectful.
Geopolitical sidenote: the Indian government conducted an underground nuclear test of 12 kilotonnes at Pokhran in the Rajasthan desert in the 1970's. For what it's worth, while in Pushkar I saw both a five-legged cow and a woman with 12 fingers and 12 toes.