If this is your first trip to Sydney you will love it! Great city (once you get over the flight). Sydney is not large, you can walk everywhere. The gay area is located along Oxford St by Hyde Park, although it is less gay then before. Staying at either hotel will not make a big difference. The gay area is a short walk or cab ride from either. If you want to be around the corner there is a Marriott (not the harbour View) right on the corner of Oxford St. It is not as nice as the Four Seasons or Oriental. Also the Sheraton is close.

Enjoy it!

PS If you are an American be sure to get your Visa for Australia before you go. The airline can generally do it.