Technically, in Judaism you should have your elbows and knees covered. I'd add to that closed shoes and a high neckline.
I'm not sure about the head covering, but if you do take a scarf, not a baseball cap or something like that.
An organized tour should be able to give you the exact information about what you're supposed to wear.
I'd also ask at what time you should come, as there are services several times a day.
The ultra-Orthodox community in Jerusalem is not very welcoming to strangers. They are especially wary of what their children see. My 8th grade went on a class trip to Jerusalem, and during a tour of one of the Orthodox neighborhoods the locals threw trash and poopy diapers at them because they were dressed inappropriately (girls in trousers) at a time when the kids could see them.
Anyway, I hope you won't let the inhospitatlity of a group of people color your view of Israel and Israelis. Israelis in general are very welcoming to guests and many will go out of their way to help you. Probably every Israeli you meet will try to convince you that he knows the best falafel vendor in the country, you've just got to try it!
I'm going to strongly recommend that you see other parts of Israel as well - Jerusalem is so very NOT Israel, and most people I know absolutely hate going there. If I recall correctly, you're Austrsalian and I'm sure youll find that Israelis take their beach culture almost as seriously as Australians (although the beaches are not as awesome).
Feel free to PM me if you'd like more ideas.
I don't know a lot about Jerusalem, but I do know Tel Aviv and Haifa.