Both options are fine for exploring. I haven't stayed at the Hilton, but the Conrad shouldn't disappoint - especially if you like casinos. The building is magnificent. If you want to dine at an aussie icon, have dinner at the breakfast creek hotel (for a steak). More upscale, try Il Centro on the river (excellent bugs), or Pier 9 right beside. Don't forget to stroll through the botanic gardens, they're quite amazing, especially right at dusk when giant bats are flying around.
If you decide not to go Hilton, try the Hyatt (probably better quality - new), or even the Novotel is decent.