The iPhones on the Apple Store (Australia) are officially unlocked and sold outright at a high price. The vast majority of iPhones in Australia are free upfront with a phone service through one of the five carriers offering the iPhone. The carriers iPhones are the ones in short supply.
These phones are locked to the network, and have a 24 month service contract associated with it. The unlock is available on request from the telco, who push it down to your iTunes.
Just to clarify (for consistency with previous posts) - carriers in Australia do sell the iPhone on prepaid, but the cost of buying it on prepaid is generally higher than buying it outright from Apple. For example, Vodafone Australia sells the 32GB 3GS for $AU1129, while Apple sells it for only $1040 (IIRC).
I was fairly lucky to get mine from Virgin Mobile Australia around a month ago, as their online store was sold out, and the (physical) store I went to only had 2 left when I came in.
EDIT (just for info for international readers):
The 5 carriers offering the iPhone 3GS in Australia are:
1. Telstra (probably the equivalent of Rogers - the largest incumbent telco in the country, and charges a hefty premium for better coverage)
2. Optus (owned by Singtel, and are number 2 in Aus)
3. Vodafone Australia
4. 3 Australia, although they launched the 3GS a month later than everyone else (Vodafone and 3 are now owned by a common entity called VHA, which is in turn owned by UK's Vodafone Plc and HK's Hutchison. Combined, they are the 3rd largest carrier in Australia)
5. Virgin Mobile (originally partly owned by Virgin Mobile UK, now fully owned by Optus. Resells services through the Optus network)
3 and Virgin Mobile have been competing quite heavily against each other to provide the best deal for the iPhone.