[vegemite]

Australia is a big land. Basically, if you are going outside of the cities (where 90% of the population live and most likely where your parents are going) then any of the big players such as Three or Vodafone will do nicely. Three have excellent deals, as do Vodafone. Optus sucks and gets endless complaints. Telstra is the most expensive, but covers more of the non-city landmass, about 90% of the continent. So if your parents are travelling outside of the cities and need data, I suggest Telstra. If they just need voice out of the cities and data in the cities, I suggest Three or Vodafone which are MUCH cheaper. Telstra use 850 for 3G in the rural areas (they call it NextG), while everyone else including Optus and Vodafone use 900. In the cities, 2100 is used by all for 3G. So if you want to use Telstra 3G outside of the cities, you need a North American phone that can do 3G 850 band. If you don't need Telstra rural data access, then a 900 / 2100 3G phone is a better choice (European model).

Summary:

Telstra is more rural coverage but much more expensive - you need a NAM 3G 850/ 3G 2100 phone to use data in rural areas.

Everyone else is much cheaper - Three / Vodafone being the best - and European 3G 900 / 3G 2100 phone is the best.

If you can avoid using Telstra, do it. They really are very expensive and most people avoid them unless they have no choice due to coverage issues with the others.

Regarding 3 - I use 3 and I love it - I rarely go outside of the cities which is 90% of the population so coverage is rarely an issue. When I do, it roams across to Telstra and I switch data off, and voice roaming works fine and is the same cost. Data roaming on Telstra with Three outside of the cities is 50c / MB, so ok for checking emails or the weather.

Another option for data are ISPs who deliver their networks over the Optus network - such as Internode. If you just want data, this is the way to go as you get the reliability of a good ISP such as Internode. And companies such as Pennytel offer a resold Optus service with free access to their VoIP voice gateway, so if you want super cheap voice calls, this is the way to go, and you can also get an ok value data plan on top of that.