I chose to go to Craters of the Moon on the advice of someone in Rotorua, who said it was well worth the trip and, most importantly, free. I found that not only did it offer the boiling puddles of mud and steaming pools that are seen on all postcards in Rotorua, but it also had some great views of Taupo as well.
When you get to the entrance, there is a small gift shop, where I bought a couple postcards, and a big sign informing you that you must keep to the track. This is definitely a sign not to be taken lightly--I saw areas of land that looked stable, only to have steam belch out of them a few seconds later.
I found the history of this place very interesting. Apparently, in the 1950s, there was only one small fumarole in Craters of the Moon, which has since stopped discharging steam. However, when a power plant came in and began taking in underground water, it not only made the geysers in nearly Thermal Valley stop steaming, but also increased the heat in the remaining water. This caused a marked increase in thermal activity in Craters of the Moon. The Craters area is ever expanding and changing as steam finds new ways to the surface. The difference in the posted pictures of Craters in 1961 and 2001 was astounding.
There are many paths that you can take around Craters of the Moon--as long as you stick to the wooden paths! I chose to go around the valley first, and then up along the ridge at the end. Along the way, there are lots of little side paths you can take, and I would recommend doing so. Many of the paths lead to balconies over giant steam vents or other interesting thermal phenomena. Just make sure that you don't mind the smell of sulfur too much before you do!
One of the coolest things I saw that I hadn't previously seen in Rotorua was the bubbling mud pool. This was pretty much the farthest point in the valley from the entrance, and it probably took me around 30 minutes to get there (although Craters is advertised as a 30-minute walk, I found it enjoyable just to amble around, read all the signs, and take any side path possible, so it took me slightly longer). I found that I stood for way too long just watching the mud gurgle and bubble.
After this, there was a rather steep hike to the top of the ridge (and, if you're not in shape, there's plenty of rest benches supplied along the way). The ridge offered sweeping views to both sides--the much more interesting direction was across Craters, seeing all the steam rising, and over Taupo and the lake to the volcanoes lying beyond.
I definitely recommend this hike--the signs were all extremely informative and I felt like I learned a lot about the area, all while enjoying an afternoon walk!
From journal Crazy, Crazy Taupo