Like fellow actors Nicole Kidman and Russell Crowe, lovely NAOMI WATTS got her start in Australia, and fondly recalls her days down under.

It was something of a culture shock," Hollywood It Girl Naomi Watts says of her move at age 14 from gray, proper Sussex, England, to sunny, anything-goes Sydney, Australia. "All these beaches and beach cultures, and the kids were very different - free-spirited and a bit mischievous - from where I had been going to school. It was very liberating."

Gone were her proper British boarding school aspirations and predictable life. She modeled, became an assistant at a Sydney fashion magazine, and went to auditions, where she met actors like Nicole Kidman and Thandie Newton; the three would eventually appear together in an Australian film called Flirting. In the early '90s, she took another leap, moving, with nebulous contacts and no guarantee of work, from Sydney to L.A., taking with her the strongwork ethic shared by her fellow Aussie actors.

"There's a sense of needing to survive," Watts says. "We're not afraid to get our hands dirty and work hard. You know, we're the underdog. I suppose everyone who comes out of Australia has this same work ethic and is there for the right reasons." The budding actress was soon winning bit parts in movies and roles on American TV, but it wasn't until she shook the scenery in David Lynch's dark 2001 film Mulholland Dr. that Watts gained major recognition. And her star hasn't stopped rising since. She won an Oscar nod for her performance in 21 Grams, one of her multitude of recent high-profile, A-list films. This month, Watts reprises her 2002 role as investigative reporter Rachel Keller in The Ring Two, the eagerly anticipated sequel to the popular big-budget horror film. But before she hit the red carpet at the première, she sat down with us and remi­nisced about the place where it all began.

Sydney is consistently voted one of the best cities in the world. Would you agree?
That it's voted one of the world's best cities doesn't surprise me at all. Because it's very progressive. It's influenced by other countries, but it's still very pure and its own place as well. It's very unique. I must say that from the time I arrived to today, it really has changed quite a lot. It has gotten much better.

Where did you live in Sydney?
I lived in the Mossman area, in a beautiful place called Cremorne Point, which lies on the North Side. Sydney is surrounded by water, and we were right there on the harbor. We didn't have a view of the Opera House or anything like that, because we were looking in the opposite direction. Never­theless, it was a beautiful view. Eventually, I moved from the North Side to the Eastern Suburbs. We had a beautiful apartment on Bondi Beach. Selling that place is one of my biggest regrets in life. We sold it for a song, and, of course, now the real estate there is worth so much. But anyway…