I have just spent 6 months living and working in East Timor and thoroughly enjoyed my experience; sure the country has a few internal problems but from my observation a) these problems are getting better given the change of government, b) money is starting to be spent by this government and more and more Timorese are working and c) msot Timorese - especially away from Dili, just want to get on with their lives and support their families.
Most of my time was spent living and working in a small village named Maubisse, there is an above average (for Timor) accommodation in the town - the Pousada sits high above the actual village andMaubisse is the closest village should you want to stay and climb the highest peak in the country - Mt Ramelau.
I also took the oppertunity to learn to dive and then undertake a further 6 open water dives with a local company. The coral and fish life are totally unspoilt and so accessible.
I could go on but suffice to say I thoroughly enjoyed my time in the country.