Thanks for the good ideas!!
Going to go to town on Friday and buy everything. Being a small town, everything here is twice the price so its better to wait to go to a bigger town.

So, after taking your ideas... here's what I'm thinking, but i know I'll go mad and buy heaps.

1 little outfit, towelling. (Winter bub needs to be warm)
A hat.
Maybe one of those 7 piece sets?? Comes with a long suit, a short suit, hat, mittens, jumper, pants and a bib. Bit hard to buy one of those because we don't know if its a boy or girl.
A soft toy for when bub's a bit older. Kmart usually has some cute giraffes or something.
A rattle.
Some J&J bath stuff. We have HEAPS of bath stuff, and you only use 2 pumps at a time. So for only a few dollars its a huge bargain!
Some nappy powder.
Picture frame.
A blankie

Oh man, I just know I'll go mad! I love buying baby stuff. Its all so tiny and cute.