Couple of great Melbourne bands that people in their particular 'scenes' might know:
The Basics: These guys do this really awesome 60s thing. Like, it's absolutely unaffected, which might not be understandable from the perspective of someone who's just heard about them as a band that 'do the Beatles and the Stones and the Kinks and the Police' - I mean, that sounds like one of the most affected things ever, but they absolutely pull it off. Just really good songs, with nice three-part harmonies. Their drummer is Wally de Backer, who you may know as
Gotye.
They just released (last month) their new album
Stand Out / Fit In, which is pretty damn good. Their earlier EPs (especially
For Girls Like You) are better, and from what I've heard (I live in Perth and haven't experienced it, since I only heard about them since my last trip to Melbourne) they are a really killer live band.
Reverend Funk and the Horns of Salvation: Aside from having pretty much the best band name ever, these guys really have the funk (something a little different to the Basics). They're a fairly permanent fixture at the ultra-hip Manchester Lane jazz club in Melbourne, and unlike the Basics, I have experienced their show, and it is really
really great. I'm not sure how easy it would be to get hold of their records unless you are actually in Melbourne, as I got them at their show. But yeah these guys are a really excellent funk band (at least by Australian standards; admittedly the funk scene here is not huge), who know to have, and (more importantly) show the audience a good time. If you have a chance to check them out you are guaranteed to enjoy yourself unless you are, you know, dead.