I-Spy said:
Rent a motorhome or campervan in Sydney. Head up the coast stopping where you feel like. Forget Surfers Paradise, it's not so good. Go to Byron Bay.
In full agreement there!
Having said that, there's loads of cool things to do in Sydney. Obviously visit the beaches. Everyone goes to Bondi and Manly, but try going up the northern beaches to Dee-why, Freshwater, Palm etc, a lot less crowded and more 'authentic' Aussie beaches.
The food in Sydney is just spectacular. Darling St in Balmain has some lovely restaurants. China town also has some of the best asian food I've ever tasted. Seafood is also world famous - back when I lived there it was all about Doyles seafood restuarant..
For touristy stuff, try doing a bridge climb, visiting the sydney aquarium, catching a ferry from circular quay to Manly beach.. also if you're there in the summer months there will be lots of outdoor concerts in the Domain which are great.
For clubs, personally I'm not a big fan of Sydney clubs, with one exception: Sounds on Sunday at the Greenwood Hotel in North Sydney runs from 2pm til 11pm (I think) and is really good fun

Arq on Tayor Square can be a bit scary (lots of very big burly dudes with no shirts on) but seems to be the liveliest club in Sydney (I have been away for 4 years though so locals please correct me).
My favourite pubs in Sydney are:
The Newport Arms, Newport - mostly outdoors with a great view.
The Oak, North Sydney / Neutral Bay - cook your own steak!
Customs House, Circular Quay - old converted building with trendy wine bar and top floor restaurant
Greenwood Hotel - old converted schoolhouse, also has a restaurant, but best on Sundays
Well hope that helps. Someone who actually lives there is likely now to tell you I am 4 years behind!
Cheers,
Mark