We go to Rotorua for the lakes

They are awesome in the summertime. Tarawera has a hot water beach (can only get to it by boat though). Blue Lake is a cool swimming lake. We go to Rotoiti, Tarawera and Rerewhakaiitu for water sports (skiing, wakeboarding, biscuiting). Lake Rotorua isn't so good for swimming in though although they do have lovely parks right on the lake edge - there are swans and ducks as well (although I hate those bloody swans!).
The mud pools are awesome to look at. Be prepared for the smell! Rotorua smells a bit like rotten eggs because of all the geothermal activity but you get used to it after a while. Lots and lots of tourist centres around now - there didn't used to be that many. But I'm sure there are still free parks to go wandering in to see boiling mud pools and hot springs.
The luge is pretty awesome as well if you are into that sort of thing (I am

). And a place with hydroslides etc - can't remember the name of it right now.
Rotorua is a beautiful place - I'm sure you will love it!