I spent a weeks holiday in Sharm El Sheik last year - scuba divers mecca! Had no troubles at all. As someone previously said, if you look like a soft touch, or you start handing out tips, expect others to try to cash in on you. But hey, it's no different to here really - just the language and culture around you is unfamiliar, so it seems daunting.
Oh, and go by the hotel ratings of Thomas Cook or A.N.Other travel agent, because they know what ratings their guests expect, based on what the agent tells them. And since the exchange rate is so good, you might as well fork out for a top class hotel.
Lastly, don't drink the water from the tap, or ice. It's worth buying chilled, bottled water at the bar (unless you like the sight of your hotel bathroom!!!)