Baz Luhrmann's films are a very acquired taste and his latest, the epic Australia, is certainly no different. The first thing to point out with this is that while it is quite obviously a film, really it's about 4 films fused together. The opening bickerings between Nicole Kidman and Hugh Jackman recall something like The African Queen and then they are thrown into what is essentially Red River and by the time all that's been done ... there's still well over an hour to go.
This is because Luhrmann is nothing if not ambitious - he is telling the story of an English aristocrat (Kidman) who comes to Australia to sell some land, but he broadens out the scope to include issues such as the war and detailing the politics of "the stolen generation" of mixed race aboriginal children. This is the kind of film that Luhrmann could have ended at a couple of points prior to when he did but in doing so he wouldn't have made the points he wanted to in their fullest terms and in fairness something like Gone With the Wind could have ended three or four times before it actually did as well.

The tone of the film changes dramatically over the course of the running time. At the beginning it is quite amusing, very silly but by the end we're in to full blown melodrama. Kidman's performance mirrors this the most markedly - at the beginning she's very two-dimensional, very camp, but by the end she's searingly natural. This is one of the brilliant aspects of the film because her performance actually mirrors her character's journey, over the course of the film and what happens she is becoming more real, more human and it's a seamless transition.
Jackman (and his soapy torso, you could feel the women in the audience melting) was charming, funny and did everything required of him. The little boy they find themselves looking after was cute, but the right side of cute - only annoying in minor stretches. David Wenham also has an obscene amount of fun playing the complete git of a villain. The cinematography is absolutely first rate and the editing for the most part kept the film driving on and ensured it didn't buckle under its daunting 166 minute run-time. So a sheened, well made, entertaining film, but one that probably requires you to know what you're getting in to - I can imagine people hating the tone of the opening and refusing to go along with the broad, sweeping changes the film makes. If you do though this film has a lot to offer.
Wonderful little review you've got there!
Completely agree with you on all fronts - especially on Luhrmann's ambition and Kidman's natural performance.