Turkey is nice, been a few times. You really need to become immune from this kind of thing, or at least play them at their own game. If they say 100 euros, you say 20 and agree on 40. Seriously - they are there to rip you off and would sell anything for any price if they thought they had got you to pay more than you first wanted to. :)
In India I once hailed an auto rickshaw and had him take me about half a kilometer in the rain. I asked him in American-accented English what the fare was, and he said 200 rupees. I started yelling at him in perfect Bengali that I wasn't born yesterday even though I am a foreigner, and that I spend a lot of time in India. He countered with an offer of 10 rupees, and I gave him 20 because I was laughing so hard. The sad thing is I know that the 200 rupees must work on some people.
It's not that "they are there to rip you off", they also enjoy bargaining tremendously. Most of them would much rather haggle to 20% the original price then just get the money, an probably feel dissapointed by the tourists who either pay or walk away. It's simply a bit of culture shock.
My girlfriend recently spent a few weeks in China, and related some of the same stories. She figured out the process pretty quick: it's not quite that the people she encountered enjoyed haggling, it's just what they're used to. Haggling successfully to a low price gets you respect from the seller.
It is a completely foreign concept to Americans, who tend to come away with this feeling that either they've just been ripped off, or they just ripped off the seller.
I don't think I would handle it well at all (partly because I'm not fond of buying trinkets anyway).
I think the people who enjoy it are the people buying, not selling.
I was recently in Taiwan with some locals, and everything we did was discounted. It seemed awkward bargaining at a 4-5 star hotel - but we ended up paying about half by paying cash in advance.
