Cockatoo Island is a large island with great views of the rest of Sydney. It used to be a heavy industrial centre, a prison and is also an art centre. It is also a camping centre with a large number of tents.
It's easy to get to by ferry from Circular Quay and it is a great place for a young child to run around and explore. There are big industrial buildings, interesting bits of machinery, tunnels, hills to climb and we were lucky to visit two days before the Biennale Festival - with its strange art exhibition - which involved 'keep fit' equipment making surreal things move - making a purple fountain spurt, gongs to chime and lots of strange things to move.
There's good refreshments - a great bar with a great view and Captain Sausage was great with kids. Avoid the first cafe - not at all child friendly.