Brighton Beach was packed by 8.30am as spectators arrived for the aquathon.

The morning's activities continued with a thong-throwing competition, sand sculpture contest and a sailing regatta.

Carnival rides and live music kept visitors entertained and a new event for 2009, the hospital bed race, drew quite a crowd.

Teams sped along Marine Dr on wheeled beds to raise money for the cancer care unit at Wollongong Hospital. Organiser Rod Masters predicted the event would become a regular feature on the Australia Day program.

"This year was a lot of fun but I think next year will be bigger and better," he said.

Karen Kincaid, from Horsley, enjoyed the range of fairground attractions with her family and said she came to the harbour because "the kids love it".

Others set up camp on Brighton and City beaches and several families opted for the essential Aussie experience of a barbecue at the beach.

Arthur and Chantal Petersen, originally from South Africa but now living in Campbelltown, enjoyed the sand and surf of City Beach on a day that was particularly special for them.

"We took citizenship on Australia Day four years ago," Mr Petersen said.

"We came here with family to celebrate on the beach, then we'll go home and have a barbie."

Phil Price, of Campbelltown, enjoyed seeing so many friendly faces.

"It's good that you can come out and celebrate our Australian pride and everyone is friends for the day," he said.

"Australia is one of the best countries in the world. We accept everyone and we're pretty laid back."

Wayne and Tracey Grief, from Woonona, enjoyed a game of beach cricket with sons Jack, Corey, Benjamin, Nathan and JT before settling down to watch the fireworks at 9pm.

It was another spectacular show, with crowds swelling to admire the display as it lit up the harbour.