Cheers Chewy.
Forgive me while I cross-post something I wrote elsewhere a year or so ago. It's still pretty relevant.
1: What does the NBN entail?
Essentially, there are two main aspects to the NBN.
(1) Replacement of the ancient copper wires running down our streets with modern fibre optic cable.
(2) Replacement of the Telstra monopoly by a wholesale service which is open to all.
Because of the longstanding Telstra monopoly on wires in the ground, Australia's communications infrastructure has progressively deteriorated.
Telstra spent as little as possible on maintenance and upgrades and concentrated on defending its monopoly. It's not entirely fair to blame Telstra's management for this, it is what monopolies always do. (If they don't defend the monopoly, competitors get established and the monopoly is no more.)
(Don't be tricked by the apparent "competition" provided by companies like Optus, Vodafone, TPG, Iinet, Primus and so on. In general, these "competitors" do not own any wires in the ground, they simply resell the Telstra product.)
(Note also that we are talking about landlines here. In the mobile space, Vodafone/Hutchinson have their own network - albeit a small one with poor coverage and major technical problems - and Optus/Virgin have a pretty decent network which is smaller than the Telstra one but still respectable. Optus also has a useful medium-sized HFC cable network in some capital cities, but they never made any money on this and stopped the rollout because Telstra duplicated it in order to make sure that this potentially monopoly-breaking development was strangled at birth.)
The long and the short of it is that we wound up with an ancient, low-quality, high-cost copper network and little hope of any genuine renewal. Telstra refused to spend any serious money upgrading it to a modern standard because there was no point - when you have a monopoly you already have all the business, so there is no point in investing money to upgrade your equipment and attract the customers you already have. (Telstra didn't really care if you switched to Optus or not - Telstra still got the line rental no matter whether you paid it to them via AAPT or Dodo or Optus, or paid it direct to them.)
(Telstra did spend money, serious money, but it went on (a) a massively inefficient company structure which wasted vast amounts on everything from multi-million dollar bonuses for Sol through to byzantine bureaucratic bungles; (b) building up the mobile network where there were competitors; and (c) paying enormous dividends every six months to keep the share price up. The in-ground network got whatever spare change was left over, which is why it is so poor by modern world standards.)
Meanwhile, Australia's consumers and businesses got shafted. We paid sky-high prices for poor quality service with very slow data rates. It didn't really matter whether we paid Optus or Dodo or Telstra direct because, in the end, the data traveled over Telstra's wire and whenever it went wrong, Telstra was responsible for fixing it. If you were a Telstra customer, they generally gave you fairly poor service. If you were an Optus customer (or with any other non-Telstra provider), Telstra shuffled the paperwork and lost the forms and generally made excuses for a few weeks while you quietly went insane or broke or both, and then provided you with the same poor service they gave their own customers. Of course, they pretended to comply with the laws that required them to service all phone lines equally regardless of who your provider was, but the reality was very different.
Enter the NBN.
Eventually, something had to give. The government asked all the telcos to tender for Australia's long overdue network reconstruction. Telstra (under Sol) simply told them to get stuffed. Telstra would do what Telstra liked. The government spat the dummy and decided to set up a complete new network, using modern technology. After some consideration, they decided not to go half-way modern with a fibre-to-the-node system, but do the thing properly and have an all-fibre system. The cost is higher to start with but the long-term cost is lower and the performance is much better.
The NBN is owned by the government for the present but will be sold off when it is finished to recover costs. Whoever buys it will be required to operate it at an agreed cost and agreed service levels (just like gas and electricity companies) and NOT allowed to sell retail connections. The NBN is wholesale only. There can be no favouritism, the NBN serves all customers equally. No consumer deals directly with the NBN Company, you deal with a service provider of your own choice - Iinet, Optus, Transact, Telstra, Dodo, whoever you want.
The technology
Around 90% of Australians will have a fibre connection. The other 10% live too far away from population centres to allow cost-effective fibre installation, so they get a wireless system. (Not the wireless you have now, a significantly better one, but still much inferior to fibre. Them's the breaks. If you want to live in a very small town or out in 20-acre block country, you can't really expect the rest of Australia to spend tens of thousands of dollars running a cable just for you.)
The NBN fibre connection replaces your old copper connection. It carries Internet, cable TV (if desired) and landline telephone (if desired).
Because it is fibre, it is vastly faster than copper, and enormously faster than any wireless technology. Exactly how much faster? Essentially, the sky is the limit. Once you have the cable in the ground, the speed is determined by the devices you plug into each end. You can upgrade it any time new technology becomes available - simply get a new modem (at your end) and (if needed) an equivalent upgrade at the exchange end.
But what about mobile? Simply, mobile doesn't cut it. Mobile is convenient, but it is very limited, and very expensive. There are now more mobile Internet connections in Australia than fixed line connections, and the number of mobile connections just keeps climbing. But fixed lines do all the heavy lifting. The (roughly) 50% of Internet connections that are mobile carry 7% of the traffic. 93% of the traffic is on fixed lines and the proportion is still going up. Why? Because fixed lines are faster and cheaper. Much faster and much cheaper. And that is just considering our current low-tech copper lines. The modern all-fibre systems, over time, will dramatically lower the cost and at the same time vastly increase speed. We are already starting to see the speed dividend in places lucky enough to have the NBN already. The cost reductions will take longer. Once the new network gets to a reasonable size economies of scale (which work against it at the moment) will work in its favour and costs will drop.
For now, though, expect to pay about what you are paying already (a bit less with luck, a lot less later on) but get vastly higher speed.
You wouldn't really get a whole first-world country with a telecommunications network as throughly borked as the one we just described. 
