Oooh two cloth newbies in Melbourne! Maybe we need to organise a meet up with a few of us for a show and tell

what i want to know is where can you buy them from? is it just online stores?
Pretty much. There is Cotton Bottom in Kew (I think it's Kew will double check), Darlings Downunder in Taylors Lakes and The Weewuns in Emerald. Check with them if they allow drop ins for shopping. I know theweewuns used to as I've been there several times
how many would we need? if we decided to use say terry cloth nappys where can i get covers for them or can i make my own?
For a newborn it would be about 3 doz so you have a good sized rotation. They poop stacks and you need drying time. Flanelette is better for a newborn. Terry is just so bulky. You could have a bash at making your own. There are a few free patterns you can download. Google wee waka and have a go. Maz makes fantastic covers too so watch out for her stocking announcements. Other covers I use are the baby beehinds pul or wool covers and the tot bots pul ones
And which ones are your faves? Which do you highly recommend?
If you want to use fitted MCN nappies I can highly recommend kissaluv, itti bitti boos, very baby (you can buy that pattern) to use with covers or All In Ones are bubblebubs, honeyboys (you can buy that pattern too)
Which should be avoided?
Cheap eBay nappies made from just multi layers of flanelette or incontinent material or fluffies from Kmart...
what else do i need to know?
Get a couple of different types to be ready for bub because not everything suits every shape of bub. After bubby arrives and you work out what suits buy more. It's worth paying a bit more for express postage than buying things that might not get more use cos you don't like them.
Also watch buy4baby or nappychic. They are second hand sites where you can pick up some great buys.

My nappy buckets came from BigW too and wetbags from whatever stores I bought nappies at the time I needed one.