YHA Sydney Harbour at The Rocks is new and has a rooftop pool. http://www.yha.com.au/hostels/nsw/sydney-surrounds/sydney-central-backpackers-hostel/ The Rocks is a part of the CBD right next to Circular Quay (where the Opera House and Bridge are) and there are lots of very lively pubs and clubs in a block or two as well. Here's an independent review on YHA Syd Harbour: http://www.australiantraveller.com/reviews/sydney-harbour-yha
But if you are in Sydney do check out the Northern Beaches as most backpackers venture there and there's a lively pub and club vibe up there.
Speaking of beaches, Bondi,is Australia's most famous beach, just 10mins to the CBD and it has a great party atmosphere. Noahs's is a backbackers with a great friendly vibe and amazing views http://www.noahsbondibeach.com/
Hope this helps, Happy Travels,
Bek From Sydney almost 8 years ago