I'm also in The Rocks for NYE, travelling up from Melbourne after the Boxing day test...i didn't buy the terrace at first but booked it later over the phone after a few enquiries and a friend being there recently and saying what a awesome spot it was. They did say they hadn't released all the tickets and rooms yet so anyone wishing to book there it might be worth keeping a eye on the situation.
Ill recommend some places I stayed an friends stayed in diff parts of Sydney.
Sydney City Center Hostels
Kings Cross Hostels
http://www.sydneybackpackers.com.au/web/index.php ( where i stayed for long term as its much smaller hostel which means u get to knwo everyone in short space of time)
Bondi & Coogee Beach Hostels