Rotorua is definitely one of the main tourist centres in the North Island. Since it is one of the main Maori cities in the country, there is much Maori culture to be seen here whether you'd like to simply take part in a hangi, or Maori dinner, or get up on stage and learn how to use poi (pretty much swinging around rope with big Styrofoam balls on the end which, when done correctly, looks really quite amazing), you can do it here. There is no end to tours offered at various places around Rotorua.
Many of these places, such as the Tamaki Maori Village and Whakarewarewa, are not only traditional Maori villages but also very active thermal areas. This is one of the major attractions of Rotorua, and you can tell this the minute you get off the bus in the city. Rotorua smells of sulfur. And when I say smells of sulfur, I mean it really smells of sulfur. After a little while in the city, you get used to it... and then you leave again and realize that everything you own smells of it. It's worth the smell though to see the attractions here. In the middle of the government gardens, there's a huge, constantly steaming pool, and there are many of the same in one of the big parks in the city. If you want to see more spectacular steam and boiling mud and the like, you can take any of the many tours offered, although I can't recommend any because I did not take one. If you aren't sure if you want to shell out the money to see boiling mud, take a walk around the lake (although the springs here are especially smelly), or go to Craters of the Moon in Lake Taupo, a huge, free, geothermal area.
One thing Rotorua is very well known for is zorbing. This was a new sport, invented by a Kiwi who was obviously bored with the total lack of adventure sports available in the country (ha!). Although I did not get to zorb in Rotorua, I did zorb in Australia and it was amazing. While it doesn't sound like a whole lot of fun to some people—getting into a big plastic ball, perhaps with a couple other people, filling it partly full with water, and then rolling down the hill—I couldn't stop laughing the entire time and thoroughly enjoyed it.
Quick Tips:
Pretty much everything that you will want to book is available to be booked at the Rotorua Information Centre. This is the main building on the end of Fenton St that is close to the lake--all major bus lines drop off and pick up in front of this building. The visitor's centre is huge and contains walls and walls of brochures, as well as four or five people each at the desks for booking activities and accommodation and for booking travel.
I definitely recommend, that if you want to do an activity, to book it at the visitor centre rather than waiting for the various shuttles that stop outside the centre (these take you around various places inside Rotorua, in a loop around the various thermal sites, or to the Agrodome, where zorbing and bungee, among other things—like lots of sheep—are located). I waited outside the visitor centre on the advising of the lady at the front desk of my hostel for the Agrodome shuttle for nearly an hour. When it finally arrived, I watched it drop someone off and then leave before I could make it to the door. This was the last shuttle of the day, and thus I missed zorbing altogether, because apparently the shuttles do not stop and wait unless people have pre-booked. Also, I recommend booking when you get to Rotorua, or at least the beginning of the day, for any activities you would like to do, because many fill up quickly, due to Rotorua's huge tourist population (at least for the North Island).
Also, if you need a home base from which to take day trips, rather than moving from city to city every couple of days, I would definitely recommend Rotorua. It is very centrally located; only 2 1/2 hours from Auckland, about the same from Waitomo (a very good day trip), and only around one and a half hours from Taupo.Best Way To Get Around:
To get around Rotorua itself, walking was not a problem. Even the Kiwi Paka YHA was only around 1.5km outside town, so it was a bit of a long walk but still very manageable. You can see many things, like the city and gardens, via walking. However, many other activities involve paying for transportation. As I mentioned in the quick tips, there are many shuttles that run to various activities outside town. The Agrodome provides a free shuttle to anyone that has booked an activity while most other places like the thermal areas (the Kiwi Encounter, and I think the Skyline Gondola) require a small fee for a shuttle to their location. These fees can add up, and many shuttles operate on a loop, so you can go see many activities on the same shuttle ticket, which is what I recommend.
Rotorua is in the center of the North Island, and is one of the major tourist attractions, so every major bus line operates here. Their pick up and drop off point is the Rotorua Information Centre, where as I mentioned above you can also book transportation. There is also an airport for those that want to fly, but the drive from Auckland, Taupo, or even Wellington is manageable and much cheaper.