I think Sydney rules at the moment on a more underground level.
http://www.myspace.com/happygohatefuck
They don't have any good recordings yet but they are probably one of my favourite live bands. Kind of grindcore meets free jazz.
http://www.myspace.com/deadfarmers
Their demo recordings don't really do justice to them. Young dudes getting way better every show.
http://www.myspace.com/moonmilk
nice ambient duo.
http://www.myspace.com/glacialavatar
http://www.myspace.com/kiosk
http://www.myspace.com/castings
a great experimental 6 piece that noone gives a shit about here. They recently put out a CD on AMerican Tapes.