Since the ACCC opposed Sony in the case, I suspect that there will be a High Court challenge on this one. Whether or not the High Court will grant special leave for an appeal to take place is another matter though. Stay tuned.
As for copying legally purchased music downunder (and in the UK for that matter), Stephen Peach is correct. It is and always has been illegal to copy legally acquired copyright music (and movies) in Oz. The back-up exception provided for in the Copyright Act only applies to programs. It does not apply to music or movies.
There is, however, a major review of Oz copyright laws currently taking place and, of course, submissions have been put boyh for and against permitting personal back-up copies of music and movies.
Whether this will result in a change of the law is another matter.
The existing policy is that the back-up copying of programs is permitted so as to enable minium disruption in a commercial context where problems occur (e.g. system crash and loss of originals due to fire, flood or other disaster). An off-site back-up enables the business to get back up and running as quickly as possible. The exception was never really intended to apply to entertainment software (i.e. games). The fact that it does is really just a bonus.
Any change to Oz law to permit back-up copying of legally acquired music and movies will require a significant change of policy and it's one that will be vigorously opposed by the recording and movie industries.
Again, stay tuned.