Simply Bhutan is an interactive 'living' museum that gives a quick introduction to various aspects of traditional life in Bhutan. Visitors are greeted with a shot of local arra (rice spirit), before being guided through mocked-up village scenes. Along the way, you can dress up in traditional clothes, try out archery and hear songs sung by Bhutanese women as they build houses out of rammed earth. It's touristy, but a good family experience.
There are also souvenir stalls, and a restaurant serving Bhutanese set meals for Nu 500.