One hundred and four kilometres from Yass, GUNDAGAI sits on the southern banks of the Murrumbidgee, at the foot of the rounded bump of Mount Parnassus. The town was once situated on the alluvial flats north of the river, despite warnings from local Aborigines that the area was prone to major flooding, and old Gundagai was the scene of Australia's worst flood disaster in 1852 when 89 people drowned. The relocated Gundagai, on the main route between Sydney and Melbourne (until bypassed by the Hume Highway), became a favoured overnight stopping point, with the bullock wagons which took the pioneers into the interior favouring a camping spot out of town at Five Mile Creek. A large punt was the only means of crossing the Murrumbidgee from 1849 until the Prince Alfred Bridge was erected in 1867; although now closed to traffic, the pretty wooden bridge can still be crossed by pedestrians. Gold was eventually discovered here, and by 1864 Gundagai had become a boom town, preyed upon by the romantically dubbed bushranger Captain Moonlight who was eventually captured and tried at the Gundagai courthouse in 1879.

Perhaps this colourful history and the road-much-travelled appeal of Gundagai explains why the town features so often in Australian verse and folk song, finding immortality through a Jack Moses poem, in which "the dog sat on the tuckerbox, nine miles from Gundagai" - and stubbornly refused to help its master pull the bogged bullock team from the creek. Somehow the whole image became elevated from that of a disobedient hound and a fed-up, cursing teamster to a symbol of the pioneer with a faithful hound at his side. As a consequence, a statue of the dog was erected at the original five-mile point: it's actually a very pleasant place to take a break from the rigours of the road, with a shady picnic area and undulating fields and hills beyond. Inside the tourist centre here, there's a range of cheerfully tacky souvenirs plus the rare opportunity to send a postcard with a special "dog on the tuckerbox" postmark.

In the town itself, the Gundagai Tourist Information Centre (Mon-Fri 8am-5pm, Sat & Sun 9am-5pm; tel 02/6944 1341) can help you find somewhere to stay if need be - and also sells a tape of several folk songs featuring Gundagai, including Along the Road to Gundagai , from which every Australian remembers only the tuneful snatch "There's a track winding back, to an old-fashioned shack, along the road to Gundagai". Also at the information centre, you can see (for $1) the miniature Baroque cathedral by Frank Rusconi, the sculptor who created the statue of the noble dog. The cathedral, a project that required complete patience and precision, took 28 years to build; constructed with absolutely no plans of any sort, it is made from thousands of pieces of twenty different kinds of New South Wales marble. Satisfying more mundane appetites, Bidgee Cakes , at 198 Sheridan St, bakes traditional tarts using free-range eggs, and sells lamb sausage rolls plus honey rolls made from local honey.

Sixty-eight kilometres north of Gundagai, HOLBROOK is a recommended food break on the drive to Melbourne (or Sydney), with two excellent bakeries on the Hume Highway as it heads through town. The Holbrook Bakery dishes out delicious beef and curry pies, and the Scrummy Buns Bakery across the road sells more unorthodox pies filled with crocodile, emu, kangaroo and rabbit - plus cappuccino and continental cakes. Perhaps these great bakeries are a legacy of a German past: settled by Germans in the 1860s, Holbrook was called Germantown right up until World War I, when anti-German feeling warranted a name change.