It's hard to believe that in a country just under half the size of New South Wales, Malaysia manages to pack in a sample of just about everything you'd ever want to find in a holiday destination.

Beaches? Got 'em. Tropical islands? Tick. Five star (and more) accommodation? You bet. Shopping? Golf? Exotic food? Unspoiled rainforest? Primitive tribes? The world's tallest twin buildings?

Yup! That's right. Malaysia has them all – and more.

But unlike some places that have set out to create theme-park perfection, Malaysia has come by most of it naturally.

Formerly Malaya, under British rule until 1957, peninsula Malaysia and Eastern Malaysia (Sabah and Sarawak) were federated in 1963.

One of the things that makes this country unique and fascinating is the blend of cultures – primarily Malay, Chinese and Indian – and this spills over into everything from the magnificent food (more of that later) to clothing styles and arts and crafts.

It's a three for the price of one country as far as culture goes, giving a richness and complexity you won't find anywhere else. There is even a Portuguese touch, and it's well worth making a side-trip to Melaka, just 147 kilometres south of Kuala Lumpur.

Melaka was settled almost 600 years ago by a refugee prince seeking sanctuary. Stumbling ashore he was so grateful for the locals' hospitality that he declared a city should be built on that spot.

Because of its pivotal position on the east-west trade routes, the area became an important empire, and rich cargoes of gold, salt, tea, opium, tobacco and perfumes were sold and bartered there. For centuries, the Portuguese, English and Dutch vied over it, coveting the monopoly of the spice trade and each left a dab of their culture – rose stucco Portuguese churches, Buddhist and Hindu temples, Dutch forts and English colonial mansions.

Malaysia's capital, Kuala Lumpur - its name often shortened to KL - at the confluence of the Klang and Gombek rivers, is where many conference and international visitors stay, at comfortable top end hotels representing all the major groups : Sheraton, Renaissance, Ritz-Carlton, Shangri-La, JW Marriott and dozens more.

The amazing 88-storey twin Petronas Towers, at almost 443 metres, dominate the city with its population of over one and a half million people. But while the towers were only completed in the last few years, remnants of the past persist in KL. Dataran Merdeka has British colonial buildings and the Petaling Street nightmarket is a reminder of another time.

While it's easy to slip into a back lane and still find people playing mahjong, or carrying on their lives as they have for decades, the side that KL presents is shiny and cosmopolitan, facing the future, and ready for anything. The country's aim is to become fully developed and prosperous by the year 2020. Already sales of palm oil from plantations throughout the country is rapidly replacing rubber and tin, and although hit hard by the global economic turndown in 2001, electronics manufacture is still a major industry.

Yet, you will miss much if you stay only in the capital. The rest of Malaysia offers everything from the country's only casino resort, 1830 metres above sea level in the cool Genting Highlands, to island retreats such as lovely Langkawi, Pangkor or the tiny, neighbouring Pangkor Laut, and of course bustling, bursting-with-energy Penang, aka Pearl of the Orient.

A 285-square kilometre jewel of an island just off the north-west coast of peninsular Malaysia, in the Straits of Malacca, Penang was the first British trading post in the Far East. Commerce and trade still feature here at all levels, from the sleek 60-storey Komtar tower that dominates Georgetown, the island's capital, to the stall-holders on the steps to Kek Lok Si, Malaysia's largest Buddhist temple.

But whatever you do, don't forget Eastern Malaysia, the states of Sabah and Sarawak on the former island of Borneo. Once this wild and jungled land was home to head-hunters, its shores threatened by pirates, the mountains and deep valleys war zones. Today's states are different, a quiet and immensely beautiful place.

This is where Mt Kinabalu, at 4101metres south-east Asia's highest peak, chops the sky with its jagged profile. Here too, at Sepilok near Sandakan, there is an orang-utan sanctuary dedicated to rehabilitating orphaned apes, and Kota Kinabalu has everything from the Gaya Street Sunday market to the playground islands of Tunku Abdul Rahmen Park, twenty minutes boat ride away.

The ingredients of Malaysia's racial stirfry: Malay, Tamil Indian and Chinese, plus Melaka's Portuguese and the Straits-born Chinese called nyonyas and babas, makes dining here a rich experience. Streetside hawker's stalls, elegant hotel restaurants, or 'banana leaf' Indian eateries where the searing curries are served on just that – a sheet of banana leaf – the choice is endless.