Can I assume this isn't just directed at UoM students? If so, can I move this to Gen Uni Discussion?
Go for it imo!
I'm really not sure. I'm starting a third year research project next semester - if that goes well, I'll do my honours with that group (I'm optimistic, but we'll see.) I've heard from others that it's important to move to a different group at some point - either at the end of Honours, or when you do a postdoc. It shows that you're able to up and move and acclimatise to a new group. I'm about to leave a group which I've spent the last year with - I can definitely see what you mean in wanting to say 
ANU is listed because I've got family up there, and Canberra's a great city. Otherwise, I'd probably go to the states.
Anyway, I'll do honours and then we'll see. I did a UROP project which I enjoyed a lot (much more then I thought I would,) any first/second years reading this who are interested in biomedical research should definitely apply. Otherwise probably go into APS grad programs or the like.
Yeah, it's definitely important to move - my decision to stay with my current group for PhD is because I really like the lab environment there, know how much I dislike it in other places /cough UROP placement, and fail to see how I would move to a 'better' lab within Australia considering how great mine is in the Immuno field, but also it's even difficult to move to 'better' labs internationally...so I figure it would be good to stay longer, all things considered. At the end of my PhD I will definitely try to move to the US for my postdoc. Originally I had thought I wanted to do my PhD in America but with all the fucking around it takes, I don't have time during Honours to commit (eg GRE, billions of applications) and that would mean being in limbo for a while if I took extra time to apply. Also, I don't think I will have any publications coming out of the end of this year and certainly didn't in UROP so I don't think I would be entirely competitive for the schools I would be aiming for at this stage. Definitely better to wait until postdoc for me, but let me know how your search goes in terms of o/s study if you do decide to go down that path as early as a PhD, I'd be super interested

Most of the people here who have gone to US for PhD have been in either mathematics or the physical sciences - it probably isn't /so/ greatly different from life science programs but it would still be good to hear some stories from those on our side of the science fence.
Out of curiosity, where was your UROP placement based and will your third year project be with an internal UoM department or an associate institute?