Samsung Galaxy 5 (Prepaid, locked to Telstra) for $99. No recharge voucher purchase required. Available in store and online.
Phone comes with Android 2.1 by default. Download Samsung Kies to upgrade it to Android 2.2.
Compared to Huawei IDEOS U8150, this phone has a better quality screen (better viewing angle), possibly a slightly faster CPU (but only just so slightly), and better build quality. However, the Huawei does have a better wireless (wireless N 150), proximity sensor and a higher resolution camera. Huawei IDEOS U8150 is also cheaper. Both phones have custom firmware available. Galaxy 5 has Swype included (U8150 can installed a special version of Swype), but by having it already included, Swype works properly out of the box when the phone (Galaxy 5) is held horizontally.
This is the cheapest Telstra Android phone with capacitive touchscreen (though there is no multi-touch). However, it is not a phone for gaming and the performance is below iPhone 3G level. It does support NextG and with the official Android 2.2, it does have portable wifi hotspot capability. A decent secondary phone.
Seems alright for $99, 600MHz CPU, 2.8" capacitive touch screen. Thanks OP