I live in Newcastle, but I prefer Melbourne over Sydney.
Melbourne, I think, is much more laid-back, but I think it's more beautiful. Sydney is noisy ... and everytime I go there it's always just too busy. I seriously think about 40% of the people there are of Asian-origin. In Melbourne, it's more multicultural ... not that there is anything wrong with either of these at all!
There's something about Melbourne I like more ... I don't know what it is though, lol. But I recommend Melbourne!