
- We spend less on fuel here, even though it is twice as expensive (we drive less)
- We spend 1% more on clothing here (retail prices are more like +15% actually)
- Rent is 23% of our income here, compared to 13% in Seattle
- We're able to save more here, and the quality of life is higher
- Internet is constant at 1% for comparable wireless
- We pay cash for a lot of stuff here, because there are a lot of places that don't take plastic
- Health care was 5% in the US (out of pocket), vs. 1% here for better cover
UPDATE: 2011 Cost of Living and Taxes below

Karin figured out we could file an amended 2009 return because we now pass the residency test. Note that you are only allowed to leave Australia for 30 days per year to avoid being double-taxed by the IRS. Also, the 2011 TurboTax interface is much improved over the 2010 version with respect to foreign income.
UPDATE 2014 - Long-term subjective review:
Sydney is extremely expensive. Much more so that Seattle. Although wages are higher. You should ask for ~40% more coming here, e.g. 70k USD -> 100k AUD to maintain the same standard of living. Housing is a big one, but then, once you have kids, it's the daycare which will slay you financially. It can be easily as expensive as rent, which is insane on it's own. For a crappy 2br apt in Sydney you can expect to pay $2000/mo. So that + daycare can be as much as $4000/mo, and possibly more depending on your income. Honestly I don't know about Seattle daycare costs, but this combination makes having a kid in Sydney ill-advised.