I dived with Borneo Divers when I was there. They were good and very cheap (though it was only a couple of weeks after a load of tourists were abducted from Sipadan so they were desperate for the business). There are some islands just offshore from KK where a lot of dive trips run to but the diving is a bit dull and the vis is crap, nice place to stay though.
Organising transport, tours, etc., is dead easy. Wait until you get there, you save a lot. I think the name of the company I used was Wildlife Adventures, they had an office in KK. Even sorting out your own local transport is easy, there's a square in KK where the minibus operators run from/to. Destination on the front of the van, pay the driver, wait until the minibus is full then go. It's a great way of travelling round. Internal flights are very cheap to the other side of the state as well.
Definitely spend a couple of days in Kinabalu Park and Poring hot springs. The shack opposite the gate to Poring does the best curry I've ever had.

Originally Posted by
andydivebum
The Jesselton is great, makes you feel like a Graham Greene character that's stepped back to the colonial days. I've had many a happy evening drinking Singapore Slings in the piano bar... Louis Mountbatten's favourite drinking den, don't you know...
The more you drink, the more free food they bring out. It starts with peanuts, ends with a towering plate of satay chicken about midnight! The rooms are very nice and not mega expensive and right in the heart of KK, a lot of the big holiday hotels are a good way out of town. There are tons of cheap hotels in the town centre that are adequate though and about 1/2 the price of the Jesselton.
The Chinese cafe under Ang's Hotel does brilliant food. Curry pasties from the hundreds of bakers are great as well.
"I hate to advocate drugs, alcohol, violence or insanity to anyone, but they've always worked for me" Hunter S Thompson