For those who prefer walking to a car rental, this is a great place. You can walk from the airport, and we actually walked into town (about nine km on a wonderful riverside path). There is a wonderful grocery store five minutes away, with several places to eat (we recommend the Pita Pit). The water taxi into Queenstown is inexpensive ($10 US per person, round trip) from the Hilton, and the views along the river are wonderful (about a 10 minute walk to the dock). Public bus also gets you there. Views from the apartment are wonderful, mountains all around. Nice bed, and a quiet place to sleep. Stars at night are worth seeing.
He did the Hobbiton tour--well worth it. And the Remarkables tour to Arrowtown features several interesting stops and lots of great information about the area. Be sure to see the 'original' site of bungee jumping, whether or not you want to consider it.
Queenstown is absolutely the "capitol" of outdoor adventuring, of ALL kinds. Even for us 'honored citizens.' And Alma's Cottage is a nice out-of-town place to stay, away from all the touristy bustle of downtown.