The Six Foot Track is a nice 2/3 day walk in the Blue Mountains between Katoomba and the Jenolan caves. It's well signed.
Another really good hike is the Great North Walk from Sydney to Newcastle. It's about 240 km and takes in some really nice scenery, staying inland. I did the whole thing last July and had a great time. Most people don't thruhike because it literally starts in Central Sydney and takes a while to get out of the city. However, I had no problem wild camping the whole way. The walk wasn't hard but the terrain was more up and down than I expected and tough in places. The trail often intersects with rail links so you can cut it short if you like.
If you are in Byron Bay there are some nice day walks in the Lismore area in the region of MT Warning.
Edited: 10/03/2006 at 01:23