We recently spent a couple of nights at Nelson Bay - Port Stephens and found a great caravan park at the base of Nelson Head called Halifax Caravan Park. They won the 2010 'Best Tourist and Caravan Park' in the Hunter and Central Coast Region, and it's easy to see why. Friendly staff and a fantastic location close to the beach and boat ramp made our stay very enjoyable.
At $30 per night for a powered site (off season) we thought it was good value for money. I would imagine it would be extremely popular in summer given the great location close to beautiful 'Little Beach' and boat ramp.
A 3 minute drive, or 15 minute walk, will take you to Nelson Bay's stunning d'Albora Marina and shopping/cafe/restaurant precinct. From here you can go on a fishing charter boat or whale and dolphin watching cruise. There are also boats for hire, and day trips for divers.
For a quieter look at the area there are plenty of paths around the beach fronts, or take a walk up the road to Nelson Head (next to Halifax Caravan Park at the end of Little Beach). It is a bit of a steep climb but the view is spectacular and well worth the effort. There is a museum, marine rescue base, and tea rooms at the top for refreshments. Take your camera if you want to capture the views!