Kuta is the low end party centre of Bali. It has recovered well from the bomb blasts in 2002 & 2005 and tourists still flock to the bars where alcohol is served freely and excessively. Many of the bars here have a house cocktail with a local Arak (rice spirit) base.
Jalan Legian between Poppies Gang I & II is the main party area and things tend to get going around midnight and go until 3 or 4am. There are also some slightly more sophisticated bar and lounge options along the waterfront on Jalan Pantai Kuta. Most are lounges that offer food and entertainment afterwards. Definitely an option to explore and not so overrun by the Australian party groups. The biggest venues are:
The Bounty
Located at Jalan Legian (100 meters south from Mbargo). Looks from the inside like a torn ship with several different areas including pool tables. The party starts everyday from 10pm but really gets going at midnight. Go here to get 'Blasters'. Rough and ready and it gets very messy.
Eikon
Located at Jalan Legian 178. Lounge bar which frequently has a decent cover band playing R&B fare.
The Engine Room
Located at Jalan Legian (opposite the Bounty). It is a small lounge bar and dance club. A little more sophisticated than some of the options on this street.
Mbargo
Jalan Legian (adjacent to the bomb memorial). Large air-conditioned bar on two floors. Models are on tap to serve you drinks. Hosts regular fashion shows. A favourite with teenage Australian party kids of both sexes. Security is especially tight here.
Vi Ai Pi
Located at Jalan Legian (opposite corner of Poppies II). Lounge style bar and restaurant with nice breezy open upper level.
Kama Sutra
Located at Jalan Pantai Kuta. This is a cavernous bar and club on the beachfront which is very popular with young Indonesians.