I prefer the state park just north of the bridge... We've stayed at Tee Pee, Mackinaw Mill Creek, and the KOA - all south of the bridge.
TeePee: Very tight park, with cars backed up right against each other, sometimes to the point that they actually block the roads. Good access to the bike path that leads into town.
Mackinaw Mill Creek: Nice variety of sites, some of the interior ones without hookups are decently large if you don't mind not being on the water. The sites on the water are very small - either very shallow or very narrow. The tree maintenance could be better (there was a branch too low for our small trailer to fit under). This is a large park and the pool and showers tend to be very crowded. Good access to the bike path that leads into town.
KOA: Not bad, not great - but overall the nicest of the three. Some small sites in the middle with somewhat larger and less used sites on the sides (with fewer hookups). Very nice trees, and nicely maintained. There's a road that can be used as a short trail that goes further back into the woods, and a dog kennel within walking distance (left side, just a bit up the road). The KOA isn't on the water though. It also has access to the bike path - just up the road near the kennel. It's the only park I've ever stayed where some guy felt it necessary to openly carry a side-arm while going to the bathhouse with his son. (For no apparent reason, as far as I can tell - the park strikes me as quite safe. I could be wrong though...)
It's a shame there's no SP on the south side near the town. I've not tried the SPs that are further out on the south side. There's one on Lake Huron, and another on Lake Michigan. There are also some Forest (state or national? not sure) campgrounds a ways south of town - but I've not tried those either.