I am a Melbournite, but currently in Sydney till September. I have also heard great things about Sayadaw U Pandita Jr. (from Daniel I.'s notes). Springvale is a way out from the city, but may be worth the trip.
I have attended the weekly sittings at BSV (traditional Theravada) in Malvern but I am somewhat detracted by the traditional religious flavour, and by the sheer numbers, which makes for a more formal and less educational situation. The meditations are usually guided by the Bikkhunis, who are very serene.
While in Sydney, I've been attending the two sanghas attached to Sydney Insight Meditators. They are broadly Western Vipassana groups.
Currently there is no comparable Melbourne group, and this might be because of a lack of Western (non-denominational) teachers in Melbourne. I have been thinking about trying to start a practice group when I return. I have mentioned this to some of the sangha here, and they have been encouraging and suggested I may be able to get some "sponsorship" (in the form of exposure via their network, I assume) from SIM. I haven't contacted anyone formally about this yet. If we were to generate enough interest, we may have a group which could perhaps attract the occasional teacher from the ITCA (http://www.dharma.org.au/3-ITCA-teachers.html)
There is a strong network of Aussie Insight Meditation groups and retreats listed here (note the lack of Melbourne groups

):
http://www.dharma.org.au/
Good luck with your search. If anyone here is interested in a Melbourne Insight group, please, let's talk further

David