I can get a good deal on Zuji for MEL-BNE flight and make it work with some good prices on Virgin Blue up to Mackay. Is this safe? How long should I leave between the two different airlines' flights? An hour, more than that? Thanks.

By combining these two airlines to make the trip, I can save well over $400 AUD.

If you're not flying Virgin between Mel & Bne (and therefore able to check your bags through) I'd be allowing around 90 minutes. You will need to collect your bags and re-check them in. Virgin have a very strict, immovable policy of no check-ins after 30mins before a flight.

I agree - 90 mins or more - these inter airline flights are quite unforgiving.

If you're travelling Virgin on both legs - a slightly shorter period may be possible.

Agree with all of the above.
The airlines here have become quite unforgiving if you don't make the check-in time - if you are on a discount ticket.
On discount tickets they will simply say bad luck and then nail you with a extremely high price on the purchase of a new ticket.

The consensus seems to be that it might not be worth the cost savings if there are any problems so I'm leaning towards simply booking the entire flight up on the same carrier. (Although I might fly up with Qantas and back with Virgin Blue because I like the VB return times better).

Can you get a reasonable price still with going with the same airline in same direction (ie even if it is the other airline on the return flight) ?
If you were on the same airline and they ran late thus making you late on your connection, then you would have a great case to ensure they didn't penalize you. It would be there fault you were late for check-in.
For the sort of dollars you are talking I would be taking the risk.
Oh by the way, are you aware that Virgin fly out of Melbourne from an alternate airport not the main Melbourne Airport. At least I think that is still the case. That may also influence your thinking. Cheers.

If I fly Qantas up and Virgin Blue back, I can do fairly well and the times work great for me. I think you mean Jetstar - they fly out of the Avalon airport (west of MEL?) which would be great since we are staying in Geelong, but Jetstar's schedules do not work for us at all - the connections through BNE are quite length and not worth the trouble.

I wish the airlines in the US would allow us to buy one-way tickets (at a reasonable price, that is!) like you are able to do in Oz. It makes things so much easier that way.

Ah yes you are quite right it is JetStar that go out of Avalon. Although I am told they have now done a deal with a shuttle company and their passangers now get about a $20 shuttle fare between Melbourne city and Avalon Airport.
Sounds like you have it figured out.
Best of luck and have a great trip - sounds like you are going to get to see some good places.

Thanks for your help. We are so looking forward to revisiting Australia after a 25-year absence! It is ironic that it took our daughter going to school there to get us back, but hey, whatever it takes, right? Thanks again