To start are there any other Australians who have trouble with online play?

When logging into championship mode and finding a game (this also applies for other online modes) my latency bar (not sure what it's called) is either none or one red bar. When I do manage to find a game with 4 bars I am usually unable to play with them as we are generally not in the same ranking bracket. When I atempt to play a game with low connectivity it is just unplayable as commands just don't come out.

I have a 24mb internet connection and my PS3 is connected directly into the modem. Is the distance of the servers just simply to far away or is there something else I can do?

I don't know what to tell you, seems to be based largely on distance between you and who you are playing.  Try playing them anyway, no bars just means it can't tell what the latency is, and even with one bar I sometimes have lag-free fights (get more lag with 2 bars for some reason).