When you first enter the town from the south you should immediately make your way around the edges of the town looking for Alien Beasts. I've tried to show the approximate locations, but it's hard, since they move.
Once you've cleared the edges make your way to the center of the town where you're going to have a fight with a bunch of Alien Beasts, including a couple Pack Leaders, who are even tougher than the regular Alien Beasts. Once you've killed the Alien Beasts, there's a lot of nice items scattered around here, including a Shard of Release and a Blessed Crossbow.
Now it's time to check the houses and buildings, most of which should have a few holes in the walls. Pay special attention to the house just to the west of the South Entrance, which contains a pack of Alien Beasts and a Mage's Bracelet in the dresser. Also, pay special attention to the building on the north end of the row of shops on the eastern side of town. Don't go through the doorway, as it will trigger a quickfire trap which will cover the entire town with quickfire, spreading from the edge inward, so you won't be able to avoid having to walk through it. If you do accidentally trigger the trap you can leave town and re-enter and the quickfire will be gone.
There's a variety of somewhat useful items scattered around the town, so take the time to find them, and there's a lot of gold ore in the room in the far northeastern corner of town, if you want to pack it out of Footracer to sell.