When we go to Sydney we always stay in the city itself - in the YHA on the Rocks most often - is then easy to get about, easy to get ferry to Manly, easy to get bus to Bondi etc. - if you want to see Sydney I think staying in the CBD is easiest - but all depends what you want to see. Sydney I find far more difficult to get around than Melbourne - the harbor is so beautiful - but it does make getting from place to place more complicated - but the ferries are a nice adventure.
ETA - Sorry I thought you were looking for a caravan park. I didn't read properly.
The Uniting Church has some cabin stye accomodation. Try googling Uniting Venues.
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Re: Sydney
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