The Museu do Índio in Rio de Janeiro is located in a gorgeous old mansion at Rua Palmeiras, 55 in Botafogo (phone: 286-2097). It has superb permanent and rotating exhibitions and some examples of Indian homes and/or ceremonial installations in the museum grounds. It also has a fantastic little shop, where you can buy baskets, pottery, handbags, necklaces, etc. Best place if you're looking to (re)decorate your apartment on a budget!
Look for the lovely Waimiri Atroari arumã bracelets, our all-time favorites. They make fabulous souvenirs to bring home.