I've just spent the last week in Paraguay and it has been one of my favourite places in our 9month trip. Mainly because you will find no gringos there! People speak guarani mainly but most speak spanish too.
World cup celebrations might have blurred usual events in Paraguay but certainly Asuncion was far from sleepy when we were there. Epic, the bars and clubs are great an everyone is very friendly albeit wondering why your there. It is far from dangerous contrary to reports in a certain well travelled book and if you do go, go with an open mind, we loved it.
We spent a few days in Concepcion too, fantastic for bird spotting, anything from ostriches to toucans fly these parts and very easy to see, hawks eagles too more so than anywhere else i've been in south america. You can stay at a farm in Concepcion too a germans owns it and offers great tours of the jungle if you like.
Cuidad del este is a bit messy for a city but just outside it is Itaipu, the largest power producing dam on earth, its fantastic and free to visit, as part of the construction of the dam a zoo and ecological and museum were built and these are free too, definitely worth a visit.
Only thing is that paraguay is not used to the backpacker so you'll have to stay in hotels, but they are very reasonable and food is great, July is a meat festival of sorts, best sausages you might taste in your life could well be here.
Main reason i like Paraguay is because its completely different to those around it, you go there and people are friendly because they are, not because they are trying to rob you or sell you something. More info check out my blog