We did Australia twice without kids, partly backpacking, partly staying with relatives.
We are now living here for 12 months with a 21 month old daughter. It's very very different to when we've been here before.
I've never been to NZ so can't comment. I do know a couple of Aussies with a child the same age who are questioning us wanting to go to NZ for a fortnight with our little one. Perhaps it's better with older kids, but our 21 month old really doesn't enjoy long car journeys, even though we stop off and she has a DVD in the car. They don't think there's much for us to do with a 2 year old, so we are questioning whether we really want to go.
I can vouch for Sydney with a 2 year old. There's a great book called "Sydney for Under Fives" by Seana Smith (ISBN 1-920727-06-X). This is a 2004 version - I don't know whether it's been updated. It's written by a mother who has really done her research and divides into:
Beaches, baths and pools
Playgrounds
Child-friendly restaurants
Culture
Scenic stroller walks
Zoos and wildlife reserves
The only thing I'd say is it depends what sort of holiday you want. When we came to Aus, our toddler took a long time to adjust to the jetlag and new surroundings. I don't think you can keep changing the environment for a child of this age without paying the price (unsettled child). In that respect, you might be better off to do the campervan in New Zealand thing because at least the campervan will remain constant!
Also, there may be lots of things you would want to do/see in Sydney that are impossible with a toddler. In particular, not being able to go out and enjoy the nightlife and restaurants might upset you if you've been used to this in the past. We are fortunate enough to have daycare and a couple of babysitters but without that I'd feel very deprived. At least if you weren't in the city you wouldn't be thinking about the things you can't do.
We are yet to do our proper exploring. The only advice I can offer is not to book your accommodation too far in advance. You can save a fortune at that time of year (look on the website wotif.com for bookings up to 28 days in advance). We've done a trip to Murramarang National Park where we stayed in a beach cabin and hand fed wild kangaroos on the verandah every morning. Our daughter loved it. CAT me if you want any more deatils.