Sovereign Hill is worth spending a good part of your day at. In fact that was all we did. Make sure to take the mine tour, it's worth the extra few dollars.
I would have liked to visit the Eureka Stockade and the Gold Museum. Also the city looked like it would be interesting in it's own right.
Quick Tips: Check out http://www.sovereignhill.com.au
This website will not only tell you all about sovereign hill, but also the Eureka Stockade, and the city itself.
Best Way To Get Around: Driving yourself works well. However you can get here by train from Melbourne cheaply. Around . Tourist shuttles will drive you from the station out to Sovereign Hill and the Eureka Stockade.