There are several places to camp around 1770. There is a van park and a camping area all within a short walk of the marina, which is the 'hub' of 1770. There is also the Deepwater NP back around past Agnes Water where the camping is cheap but fairly basic.
We stayed here http://www.1770campinggrounds.com/
and it was fantastic. If you are planning to go in school holidays bookings would be essential. It was busy when we were there and we were luck to get a site, mainly because someone had gone home early. The chap who was managing the place was extremely helpful and the facilities fantastic - camp kitchen, laundry and clean shower block.
Never been to Hervey Bay so I can't help out with that one.