Stay in Palm Cove or Port Douglas. Only stay in Cairns if you like pubs, clubs, McDonalds, backpackers and partying.

Palm Cove is about 25 minutes north of Cairns, Port Douglas about an hour. They are the two main beach resorts in the Cairns area (and Cairns itself has no real beach). Wherever you stay can arrange transport from/to the airport, so a car is not needed (though always useful, of course).

Some reef trips depart from Port Douglas, though most depart from Cairns. Again, wherever you stay can arrange reef trips for you, including transportation (so the only "advantage" of staying in Cairns versus Palm Cove is you "save" the 25 minute bus trip into Cairns to go out to the reef). We've always stayed in Palm Cove (except once, when we had some Hilton points to use and stayed in Cairns .... never again).

Both Palm Cove and Port Douglas have a variety of accommodation, from the more budget end to reasonably high end.

There are a number of threads here dealing with Cairns vs. Palm Cove vs. Port Douglas etc. so you may want to read through some of those.

Most people probably go to Kuranda. Though a bit touristy, it makes for a nice day out - take the train up and the cable car back.
http://www.kuranda.org

The video on this site (scroll down) will give you some idea of Palm Cove -
http://www.palmcoveaustralia.com

You can find a variety of Palm Cove accommodation here -
http://www.palmcove.net/index.php

You can find information on Port Douglas here -
http://www.visitportdouglasdaintree.com.au

My preference would be for Cairns. It's an easy place to walk around, and most of the trips to the reef leave from here, as do many of the tours for around the tropical north Queensland area if I remember rightly. I don't remember it being a place of partying, but then I am not a party person!

There are many hotels at Great Barrier Reef, you can compare the rates of each one by visiting expedia.com.au.
If you are looking for car hire than visit http://www.sixstarlimousines.com.au/

Hope the resource provide you will be helpful.

I would stay in Cairns rather than Palm Cove for reasons of convenience and proximity to where everything is, and I'd choose Cairns over Port Douglas because you'll have more choice of reef tours in Cairns than in Port Douglas.

For information on choosing a reef tour, this webpage covers most of the options:

http://www.cairnsaustraliatravelguide.com/great-barrier-reef-tours.html

The Daintree is well worth a visit. We did zip-lining up there (also called Jungle Surfing), great fun once you get over the initial fear.

As for hotels, the 'Jack & Newell Cairns Luxury Apartments' near the Esplanade gets pretty good reviews.

I stayed at the fabulous (but pricey) Thala Beach Lodge just outside Port Douglas. From Pt. Douglas, there is access to all the reef tours and other tours you could want. Be sure to choose a reef tour that includes a semi-submersible submarine. That was INCREDIBLE!!!!!

Songdoc: I read your reviews of Thala Lodge and it looks amazing. (You know I trust your judgment from Kauai reports). How is the transportation arranged if you don't have a car and don't get the dinner inclusion at the lodge? What did you do?