Is 10am too soon to start drinking? Not if you're in Dublin and it's St Patrick's Day. My muesli and green tea have barely made it past my oesophagus, and a few hardy souls outside my hotel are already cracking into the creamy black stuff.

Although I don't want what they're having (Guinness gives me a headache), I can hardly begrudge them. Ireland is, after all, the spiritual home of drinking and it would be churlish not to celebrate the country's patron saint, a man credited with spreading Christianity in these parts and driving out snakes in the bargain.

The fact that he did so more than 1500 years ago - and that Ireland is probably too cold for snakes - is of little consequence. Paddy's Day, as they refer to it around here, is one of the most recognised holidays on the global calendar and is really just an excuse to get your green on and party.

"It wasn't always like this," admitted Liam, who drove us from the airport the day before Paddy's Day last year.

"A few decades back, Paddy's Day was relatively quiet. It was a religious holiday and the pubs were closed.

"We'd normally attend Mass, eat a meal and have a wee snooze. Sometimes we'd go to a hotel to watch the American tourists sing Irish songs and congratulate themselves on their Irishness."

In the mid-90s, however, the canny Irish Government recognised the economic value of breathing life into this national holiday, and now thousands from all over the globe descend on the Emerald Isle come March 17.

The mother of all events takes place in Dublin, where the holiday has morphed into a six-day festival that includes everything from film, comedy, music and debate to treasure hunts, fun fairs and, this being Ireland, the incomprehensible sports of hurling and camogie.

Stomachs well-lined, we head out from the gracious Alexander Hotel and are immediately thrust into the melee: thousands of people seem to be on their way to the city centre where the world's second-biggest St Paddy's Day Parade is due to start at midday (New York's is the largest).

I've forgotten to pack anything green and am not tempted by the salesmen on every corner flogging tacky hats and scarves. It doesn't seem to matter though, as everyone's joy at simply being here is infectious.

We're also relieved the weather has played its part. The previous day we'd flown into the teeth of a northerly gale and rediscovered religion. Even living in Wellington couldn't have prepared me for the rough landing. But Paddy's Day dawns bright and sunny and, although the gloves and scarves are out, the sunglasses don't leave my face all day.

The organisers must have taken pity on us, because we somehow wind up in the media VIP seats - right next to Irish President Mary McAleese, the Lord Mayor of Dublin and other Irish celebrities. I'm convinced the good-looking chap behind me is from one of the boy-bands Ireland seems to churn out, but a local informs me he's a TV news presenter.

The theme for last year's parade was "The Sky's the Limit", which, as far as I can see, means anything goes. It isn't, however, a byword for homespun or cheesy: some serious blood, sweat and tears have gone into this slickly professional parade, which features more than 2000 performers and floats that cause a collective dropping of jaws as they pass.

For two hours, giant puppets, dancers dressed as exotic birds, marching bands and street theatre troupes compete for our attention. More than 675,000 spectators discover that pigs can fly, and that men can indeed carry (fibreglass) cows on their backs while playing the drums.

I'm mystified as to why there's no Irish dancing on display, but am thrilled by the multicultural flavour of the parade, with performers from Italy, India, Germany and Canada all bringing their own styles and sounds to the party.

A head count of the many marching bands that have flown in from the US means there's almost more Americans than Irish in the parade. I also hear a lot of American accents among the crowd.

Not that the locals are complaining; in these tough times, the influx of US dollars will come in handy.

The worldwide recession has hit Ireland hard and the roar of the once-lauded Celtic Tiger has been reduced to a purr. One article I read over breakfast has Ireland's unemployment rate sitting at almost 11 per cent.

We meet Donal Shiels, the St Patrick's Day CEO, who tells us that this year, of all years, it's important to put aside our worries and have fun. "It's a chance for everyone to be Irish for 24 hours and to discover what the word 'craic' really means."

For the record, it means a good time, and that's certainly what we experience in Dublin. We drink far more than we should, eat too much deep-fried potato and are seduced by the charms of Dublin and its lucky inhabitants.

The next day, nursing sore heads, we head out to explore this magical city set around the curve of Dublin Bay. Intersected by the River Liffey, Dublin has two distinct hemispheres, each with their own charms: the north is grittier, a tangle of working-class streets and pubs where many green-clad, red-eyed revellers are still on their way home from the night before.

If, however, you wear more black than green, you'll probably be drawn to Dublin's more affluent Southside, where the famous Guinness Storehouse, the grand Trinity College and the nightlife of Temple Bar will relieve you of many hours (and euros).

The last time I was in Dublin, I was in my 20s and flew over from London for a girls' weekend.

Then, as now, I fell in love with the place and spent hours Googling "journalism jobs in Dublin".

As soon as this recession is over, I'll be back...

Stay: At the Alexander Hotel, Marrion Square.

Visit: uinness Storehouse, not just for a drink but for the fantastic views over Dublin City.

Eat: At Bewley's, the most famous cafe in Dublin that's been serving great coffee and wickedly calorific cakes since 1927.

Drink: Take your pick ...

Sharon Stephenson travelled with assistance from Air New Zealand and Tourism Ireland.