I'm considering staying at the new Sydney Harbour hostel in the rocks district but i'm concerned it may not really be that fun of a hostel Has anyone ever stayed there? I'm also considering Sydney Central hostel and Wake Up! hostel. Any feedback on these? These seem to be the top ones in Sydney
Sydney Harbour YHA Hostel vs Sydney Central and Wake Up!
You should check out Glebe YHA just 10 mins on bus from downtown Sydney. Its got a nice atmosphere with weekly BBQ's, its not too big so you meet people and Glebe is full of local shops and Cafe's with a great feel.
I stayed there a few weeks back on someone elses recommendation and i'm glad I took their advice. 
I was looking into that one actually but was a little put off because it was outside of the city. Did you ever find it to be a hassle when going into Sydney or returning back? I definitely want to stay at a place that has bbq's, movie nights, etc type of things. It will give me a chance to meet other people since i'll be travelling alone.
It's not outside the "city" - only outside the central business district. Glebe really is a much nicer area of the city to be in than the CBD, so that's a plus in my book. Busses also go very regularly (every ten minutes until late in the evening; then still frequently enough to be useful until midnight), stopping nearly in front of the hostel. And in a pinch, the distance is quite walkable. (15-20 minutes to Central Station if my memory doesn't deceive me, although I do have to admit that I walk a bit faster than most people. *g*)
Ohhhh gotchya! To be honest, i didn't really care much for CBD so i wouldn't mind staying somewhere else. The new YHA in the rocks is really catching my interest though. I can always try both 
I am glad you are coming to Sydney!
All of the places listed are great and have their own appeal.
The Sydney Harbour YHA is the newest hostel in Sydney and has an amazing place down by the harbour. Glebe is also a fantastic part of Sydney (I live there!) but it is a bus trip there and back to get anywhere. If you are keen on meeting people though I think you should come check us out at Wake Up!
We are a big place but we have the best atmosphere you will find in a hostel and there is something on everyday to get people together and having a good time. At the moment we have a big group on a free beach walk along Sydney's lovely coastline. We are also within walking distance of most of Sydney's city sights. -snip-
Wherever you stay I hope you have a mad time in Sydney!
Cheers, John @ Wake Up!
Moderator comment: John, I'll leave the guts of this post in since it's clearly on topic and you're not pretending you're anyone you're not. But we do have strict rules about promotions and I've removed the links in accordance with this. Here's a link to the Forum Rules
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i stayed at wake up, it was a pretty good hostel, only 1 problem, the bloody wake up calls that sound in every room at 10am (ish), which is no good when you have a steaming hangover!!!
haha.. people do have a love/hate relationship with the wake up calls. The way we see it doing a quick shout out at 11am to make sure you don't miss out on something free and cool is worth it!
You can catch up on your sleep when you are back at home :-)
Cheers,
John @ Wake Up!
Yeah really liked the Glebe movie night. Big sofa's and a chance to relax. As already stated by others the Glebe buses are very regular and it really is walk-able to central. I did it everyday as love the sunshine.
FYI just so you know - At the bottom of Glebe Point road and 5 min walk from the hostel is a lovely little park which you can chill out in when you don't fancy the big smoke. Trying both sounds like a good idea tho. You may need to book tho.
My vote would be for Glebe YHA as well! I've stayed there a few times, and it's in a great area.
No hassle with getting into the CBD/harbour area, as buses go very frequently as Sander mentioned. It's also possible to walk into the CBD along Bridge Road and past the fish market and Darling Harbour if you felt like that. When I was on a WHV I stayed at the Glebe YHA for a while when working in the CBD, and sometimes walked to work when I didn't take the bus.
The YHA in the rocks that you mention looks like a good location, particularly if time was quite limited in Sydney on your travels.