A great way to see the famous Sydney Harbour is to hire a Kayak from Manly Kayak Centre. This place is located on manly wharf next to manly wharf bar. There are different kayaks available, you can get a single or double, maybe its a good idea to have kids on a double with an adult. Prices are pretty good starting at $25 for an hour.
Once you’re on your kayak you can paddle around to numerous beaches including secret beaches you can only get to via boat/ kayak. The best thing about manly kayak centre is that you can paddle to these secret beaches and if you're too tired to paddle back they will bring a load around collect you and tow you back to where you started.
(Note that the Manly Kayak Centre is closed during the winter months).