I know it sounds a bit lame, but I guess my most honest answer is it doesn't really matter where I am or what I actually do as long as I can hangout with my friends.
Now that I work pretty much all year round, I don't really have a "summer break" as such - but back when I was at school I'd usually spend my days lazing around the house playing video games, hitting the gym or going for a swim.
This was back when I was living in Italy and the temperature and humidity during the summer made it pretty difficult to do much else during the day other than hide in air-conditioned environments.
In fact, most Italians retreat to the mountains or the coast during the summer months, and everything in the big cities just closes down - including a lot of the stores!
In the evenings I'd mainly hang out with friends in touristy bars or sit around on the streets drinking. This might sound strange to people in other countries, but it's kind of what a lot of young Italians do to kill time in the summer.
People congregate on bridges and piazzas, and just mill about, drink Peroni beers, listen to music and try to impress the opposite sex.
There are also loads of open-air nightclubs that are set up during the summer months.
All these things, plus the tasty food, makes me think that the real answer to my favorite way to spend my summer break would be "to go back to Italy".
At the moment I'm living in the UK, which is a lovely place to live - except for the fact that the weather doesn't seem to get any better during the summer (and drinking in public is either banned or frowned upon).