Swirling, otherworldly mists, steep streets lined with art-deco buildings, astonishing valley views, and a quirky miscellany of restaurants, buskers, artists, bawdy pubs and classy hotels – Katoomba, the biggest town in the mountains, manages to be bohemian and bourgeois all at once. It's got a great selection of accommodation and is a logical base, particularly if you're on a budget or travelling by public transport.