Summary answer for a few posts:
Bendigo, fine, very "Australian", not rough, larger regional city but with classic Victorian architecture from Gold Rush, only 2 hours (max?) by train from City, healthy economy, see
http://www.greaterbendigo.communityguide.com.au/
Albury/Wodonga vs St. Kilda, if Albury/Wodonga, live Albury! If working St. Kilda (I used to live there) many nice suburbs e.g. bayside south of St. Kilda i.e. Elwood, Brighton, Beaumaris etc and bnorth back to city e.g. Albert Park, Port Melbourne etc.......but some of the most expensive in Australia :( Melbourne real estate is generally better value in western suburbs, with some absolute diamonds hidden e.g. Williamstown, and by public transport to city (25 minutes), St. Kilda extra 15-20 minutes.
Werribee in western suburbs mentioned below, between Geelong and Melbourne, but like Williamstown direct train to city. Others nearby Altona and Newport, for example.
Eastern suburbs generally much further from city and more expensive, luckily for western suburbs many easterners turn their noises up :) but as a taxi driver told me many years ago, the most problems they have are within Dandenong, Frankston and Carnegie triangle :(