Kagoshima

Check out the hot sand bath onsen in Ibusuki. Kagoshima city itself doesn't really have any major sites aside from Sakurajima but the food there is really good - black pig (Kuro Buta), shaved ice dessert (Shirokuma) and Castadon Manjuu. Kagoshima is worth going to just for the food.

Yakushima

Absolutely beautiful! Monkeys, deer, great hiking, 3000-year-old cedars. There are some campsites there that rent tents and other camping gear. It is one of the most rainy places in Japan so get the idea of sunny beach holiday out of your heads now.

to stay:
Yakushima Youth Hostel - on the south of the island at Hirauchi, a 15 minute bike ride from the seaside onsen. About 4000 yen including two meals. Fairly new, there's no bunks, just tatami rooms with futon. You can rent bicycles and cars from the YH and they can also set you up with tours for the Jomon-sugi and Shiratani Unsuikyo (you can see the Princess Mononoke forest) hikes, which i would put at the top of your list to do, but the tour guide is not really necessary and quite expensive.
There's also a minshuku on the south of the island that comes highly recommended in the guidebooks. It's slightly more expensive than the YH and there's a very basic and very new YH at the port of Miyanoura.
Yaedake - a minshuku in Miyanoura costs about 6000yen per night per person including dinner and breakfast. They can arrange cars river kayaking, and informed us of two very cool festivals going on that we otherwise wouldnt have known about.
http://www.jnto.go.jp/eng/location/rtg/pdf/pg-708.pdf
There are three main campgrounds, which are marked on the car-hire company map. The one at Anbo is around 1500 yen, and really nice, the one at the southern end of the island is nice too, though if you drive past it you can camp on the beach for free instead. The one at Isso can be very very cockroachy.

to see:
Jomon-sugi/ Wilson Stump a well marked backcountry hike, with much of it on wooden walkways and though very long not too physically demanding. If you can rent a car and make it to the parking lot for the hike then maybe a tour isn't necessary. Just make sure you start very early for the Jomon-sugi hike (6:00am!) - it's a 10 hour round trip.
Everywhere on the island, but mainly on the west side and the road leading to Yakisugi land are hilarious monkeys - the best thing about Yakushima! !
Yakusugi Land Hikes - range from 30min to 3 hours.
Okonotaki - Drive around the island and stop off at these waterfalls and take a dip if it is warm enough. Some of the waterfalls are on the top 100 lists in Japan.
Nakahama beach - The beach where the sea turtles lay eggs in the summer - very cool, but the turtles only lay eggs in the summer.
River kayaking is great fun and do the Anbo river if you are going to do it.
The seaside rotemburo on the south side of the island is very interesting. It is just made from the tide so it is 100% natural. There is no one there to collect money or give you towels nor is there any building/lockers/changing room. It is just naked you and the ocean. It is not seperated so you are bathing with both men and women. The night-time is loads of fun. Make sure you check the tide times to get there at the best time for water level and temperature.

Stop by the Cultural and Environmental Learning Center in Miyanoura and let the nice ladies in orange outfits teach you about Yakushima. The museum is really interesting and they have tons of info on planning your trip. Also, they are really nice ladies.

getting there and around:
There are two ports (Miyanoura and Anbo). Both are about the same in terms of places to eat and walk around. Getting there and away is easy. You can take the 20 min flight from Kagoshima that costs around 10,000yen or the Toppy (Jetfoil) ferry that takes between 2 and 3 hours (also from Kagoshima) and costs about 7000yen or the normal ferry that takes 4 or so hours and costs less than the Toppy. Beware that the jetfoil gets cancelled in the wind. You can pre-book ferry tickets.
A car is highly recommend to get about then it doesn't really matter where you stay (about 3000yen/day). You must rent a car for at least one day to have the freedom to stop when you want to. Cycling is also recommended.

Some Car Hire companies also rent camping equipment (tent, sleeping bags, foam mats) for about 5000-6000yen for 3 and a half days. Tell them what time you'll arrive on the ferry and they'll meet you with the car, camping equipment inside, at the ferry dock, and when you leave just leave the equipment and keys inside, so it's all really convenient! Try Kamiyama Renta Ka- - 0997-49-7070.

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