The Garden of Evening Mists by Tan Twan Eng (2011). Set in the Cameron Highlands but resonating with the broader history of Malayan Chinese and the Japanese occupation, Tan Twan Eng's novel — about a former judge and her relationship with a Japanese gardener after the war — is the most lyrical recent fiction about Malaysia. His earlier novel The Gift of Rain is set squarely in Penang during the Second World War and is the better starting point for a traveller to Georgetown.
A History of Malaysia by Barbara and Leonard Andaya. The standard modern history, balanced and readable, covering the peninsula from the Malacca Sultanate to the present. Good context for understanding the layered communities of Penang — Malay, Chinese, Indian, Eurasian — and the way they fit into the wider story.
This Endless Noise: Travels in Malaysia by Brian Yapp. A wry recent travel narrative by a Malaysian-Australian writer returning to his ancestral country, including extensive sections on Penang and the food culture.
The Penang Heritage Trust's walking guides. Available from their shop on Lebuh Pantai and the Georgetown World Heritage Office, these slim trail guides are the best companions for a self-guided walking tour of the heritage zone — small, accurate, well written, with proper street maps.