Katherine is a town of ~6,000 people located a bit over 300km south of Darwin in Northern Territory, Australia. The town is famous for its large farming operations and for the thousands of backpackers who travel there each year to make an extra buck before continuing on their travels.
You can get to Katherine hostels by bus or The Ghan (a train that runs from Adelaide to Darwin, twice a week). These are the only ways to get there, unless you have your own car (which is a huge advantage considering the distances). If you choose to drive through the outback take care, because there are long distances between rest stops, and extreme conditions. Be sure to pack plenty of water, food, and equipment, just in case.
Katherine hostels are known for arranging jobs with local businesses for travelers. There are also job agencies around which might be worth contacting if you're looking to work in Katherine. The pricing for Katherine hostels is reasonable, but some of them are a bit off the main town proper.
Katherine is surrounded by amazing natural beauty. Nitmiluk National Park is definitely worth visiting, and many Katherine hostels do make daytrips there (if not, you can always ask a travel agency to arrange things for you). Nitmiluk National Park is where the beautiful and famous Edith Falls are. Another point of interest close to the city is Katherine Gorge. The gorge makes for an amazing half-day or full-day trip for you, your friends, and a couple of kayaks. These trips can also be arranged through hostels or travel agencies.