Here is a start. First few are Orhan's previous posts. I took a wide definition of modern for the links.

Most standard tourist destinations are architecturally inspiring like Hagia Sophia, mosques, covered markets...Topkapi Palace is interesting to observe for a different concept of a palace. It also has killer views. If you are into archeology, the museum in Istanbul is totally underrated. Another spot for awesome panoramic views is Galata Tower. At night it's a dodgy restaurant, but during the day you can go there for views only. (It used to be free if you are willing to climb the stairs) Most of that area is popular with architecture offices these days.

http://archinect.com/features/article.php?id=77781_0_23_0_C
http://elseplace.blogspot.com/2009/01/turkcell-ar-ge-building.html

http://www.istanbulmodern.org/
http://www.santralistanbul.com/index_en.html
http://www.kultur.gov.tr/tr/ayasofya/ayasofya.htm -not contemporary, some can argue it's modern
http://www.pbase.com/vieripbase/ataturk_kiosk
http://static.panoramio.com/photos/original/8294884.jpg -way out of town
http://www.nsmh.com/dosyalar/nsmh/portfolio/130_goksu_ofis/004.jpg
http://www.som.com/content.cfm/natalie_de_blois_interview_5
http://www.flickr.com/photos/nyah74/tags/atat%C3%BCrkk%C3%BClt%C3%BCrmerkezi/

neighborhoods:
Istiklal Street and environs
Old Peninsula
I'd recommend a "vapur" trip to Anatolian side even only to see the silhouette of old city, or a Bosphorus tour to see the buildings along the shore. It's an interesting survey of the landscape of the city from water level.
There are bunch of new shopping centers along the subway line, if that's what you mean by development. Some are actually interesting like this one:
http://www.nytimes.com/2006/12/13/realestate/greathomes/13gh-istanbul.html?_r=1&scp=4&sq=kanyon&st=cse

have fun..

thanks alot,
i missed the Orhan Ayyüce article, very useful!

Is there any work in the city by some of the big shots?

Any corbusier or something cool from the period?

I'm all for modern, but you're going to a 2700 year old city for god's sake. If we say modern = 20th century, you're passing on 96% of the architecture.

I highly recommend the Rustem Pasha mosque by Sinan. It's not modern, since it's over 500 years old. but it's build on an elevated platform, w/ shops below.

The shops generated income to pay for the mosque (any developer today would recognize this strategy), and by being raised, it effectively becomes invisible...you'd never know it's there just walking around. Also, raising it up creates a great sense of quiet/solitude, removing it from the hustle/bustle of the city.

There are dozen's of incredible mosques like this...very small, often off the beaten path (though they're right in the middle of the city), that are hidden gems. While the crown jewels (haigia sofia, blue mosque, etc.) are architecturally amazing, you'll be in a sea of tourists. Find the small gems, and enjoy being the only foreigner there, sometimes the only person there.

Istanbul's great...enjoy your visit.

thearchitectt, It's funny you mention Corbu. According to an 1949 interview, he admits he screwed up and lost a possible commission when he wrote Ataturk that Istanbul doesn't need an urban plan, and it should be left as is, antique and dusty. (I'm translating from a translation, but you get the point)

There are few buildings by international modernists mentioned in Orhan's article, and locals like Seyfi Arkan and Ruknettin Güney. I'd first look at most of them here - http://www.archmuseum.org/Gallery/Photo_6_3_the-new-approach-towards-the-contemporary-movements.html?Page=1 - and then decide if it's worth the hassle to find them. Istanbul is probably stronger in Art Nouveau building stock than modern.

Meydan, a shopping complex by FOA is worth a visit. It's on the Asian side and easier to get to by car or taxi. (It's next to the Ikea)

corbusier was hired by municipality of izmir, third largest city in turkey, in 1948. he produced major plans but, needless to say, his plans were never realized and caused some outrage and partially holding his fees. below are some pictures of his izmir plans and prototypical housing sketches followed by his sketches of istanbul buildings and two of the photos he took in istanbul and a picture of him when he was there. he did not hesitate to knock out many historical parts of izmir, unlike istanbul, he promised a lot of construction 'dust.'
it is trivial to your question but related all the same. link

you might also be interested in this book by sibel bozdogan.