Alex,
If you turn right at Berry and go through Kangaroo Valley to Mittagong it is a loverly drive but you miss Macquarie Pass. You go over Brown Mtn into the valley and then up Barrengarry Mtn to Mittagong. To take Macquarie Pass you turn right at Albion Park Rail, through Albion Park (stopping to admire the big 'A' frame house belonging to my mother-in-law
) and along the Illawarra Highway.
If you go via Kangaroo Valley you can stop at Fitzroy Falls and go for a short walk to admire some great Sydney-basin cliff lines. You can also turn left along Nowra Rd, continue onto Yarrawa Rd, turn left onto Merryla Rd, go through Manchester Square (I kid you not) and into the state forest for a picnic. If you have even a light duty 4WD you can continue to the end and get views over the Kangaroo River above the dam. Unfortunately the road down to the old farm, which is a great picnic spot, has been closed - apparently for safety reasons. Probably idiots taking the wrong vehicles down there and getting into trouble
.