Palau is most famous for scuba diving. One of the most famous dive sites - Blue Corner, with constant sharks and a high current - is located less than 1 hour's boat ride from most resorts. Many live aboards like Ocean Hunter operate out of Palau. There are also tours to WWII battle fields on Palau.
The Blue Corner, German Channel, Ulong Channel and Blue Holes are all amazing dive sites. You can dive the same site again and again and have completely different experiences each time.
Palau is also famous for its jellyfish lakes. These lakes contain jellyfish which have evolved away their stingers in the absence of predators. There are many tours which will go to the jellyfish lake to snorkel. SCUBA diving is not permitted, nor is necessary, in the jellyfish lake. Palau Jellyfish Lake is included in the category of natural phenomena and scientific mysteries.