We found the street artists on Castle Hill in Budapest (by the Fisherman's Bastion) to have some quality works. Also those near the synagogue. Of course, the Charles Bridge artists in Prague should be on your list, too. If your taste runs to icons, you can find good ones just about anywhere in Bulgaria -- our favorites were in Veliko Trnovo, especially the little one-artist shops where you can watch them being crafted.
In Kalocsa we opted to visit the town rather than take the included tour (I think it was to a horse farm and paprika museum). We found a bookstore with some local maps and prints, and there were several other shops that looked interesting once you get past the farmers market area (although that was pretty interesting, too!).
If you go to Bran Castle in Romania you can find some locally-made ceramics in the commercial area outside the castle, but most of the merchandise there was pure schlock.
I hasten to add that we are not folk art connoisseurs and that our tastes are fairly simple, but we do try to scope out locally-made products on our travels and these are the things we enjoyed the most on that trip (which we took in April 2012).