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Yes, STA are quite big in Europe and Australia. I've been to NZ and Aus with them. The only problem I find is that the sales representatives will try and sell you lots of add ons. I only wanted flights, but they spent half an hour trying to get me to buy white water rafting/bungee jumping/desert trekking "experiences" that I definitely did NOT want!
S once booked a hotel through STA when he was studying abroad, and not only was the property overpriced, but it was also in an inconvenient location and not even close to where he needed to be. I remember that he told me about it, and I asked him to see if he could get a refund. I think that he did, in fact, get a refund, but I think that there might have been a service charge from STA. Then he went and booked a hotel on his own.
I did a Euro tour with them. They do have good deals on flights. Sometimes they are even cheaper after you proceed with purchasing it online. Happened to a friend who bought a ticket to bali. Hostels are often centrally located, but hotels can be a bit far away sometimes. If you are going for a group thing it is totally fine, but if it is just you and a friend, look into where you are staying first. The price for hotels are still a good deal. Overall, it was a great package and price. There was a lot to see, it wasn't much of a vacation because you are constatnly on the go, but it was an unforgetable experience.