I know that we've had some lengthly [webmasterworld.com] discussions [webmasterworld.com] about the importance of hosting websites in China, but I'd like to ask the same question about .AU sites. Is it important to host your Australian domains in Australia? Is it OK to host them in the US or Europe?
Yup. I'm clear on those things. I have a .com.au that I'd like to add to a cluster of sites hosted in the US. My reasons are purely selfish. I have a CMS software licence on that server and it would make my life easier if I could control that site from there as well. However, if hosting .au in AU is preferable then I'm open to that as well.