Townsville is the best place in Oz -- really helpful and friendly people. Maggie Island is easy to get to and is a tropical paradise. You can see koalas in the wild up near the fort. You will have a brilliant time here.
I had a brilliant time in townsville. It's a place where you can go to get a real feel of Ozy life as there isn't a huge backpacker appeal. It's just a really nice town and I look forward to going back. Another bonus is that it is a base for the Oz army so there were plenty of fit young men around. This was way back in 2000 so hope not too much has changed!
Townsville is a coastal city of about 180,000 residents in the northeastern parts of Queensland, Australia. Bruce Highway (which goes through the east coast) runs near Townsville which is known for its great location for several reasons. It's close to the central part of the Great Barrier Reef, and this makes the city a common entry point for snorkeling / diving groups. Townsville is also known for its sun (320 days of sunshine on average / year), so the hostels in Townsville are busy all year round.
Besides Bruce Highway, Townsville has its own eponymous airport, which is located about 10 kilometers west from the main city area. The city is also served by bus and train lines. Most bus passes you can purchase (for use while traveling through the east coast) will allow you to choose Townsville as a stopover. This being said, rental cars are a great traveling option in Australia and highly recommended, especially if you're traveling in groups because of the affordability and convenience.
Townsville hostels are of good value and the selection is good. Price range reflects that of other places in east coast Australia: you'll be looking at about 20-25AUD a night for a dorm bed and a bit more for double / twin rooms.
There are plenty of things to do and see in when you visit a Townsville hostel. The local stadium (named Dairy Farmer's Stadium) hosts sporting events, mainly Rugby League. If you want a nice view of the city, the Castle Hill in the middle of the city is the place to go, and you can also see the famous Magnetic Island from here. (You can book tours to the Magnetic Island from the city.) There is also an aquarium and many museums and gardens in the city.
The most interesting thing for people visiting Townsville hostels is the Great Barrier Reef. Check the local tour operators for details. Townsville hostels are usually of great help too. They can often even organize tours for you.