Being Australian I saw this story on a lot of Facebook news websites.
Never found her funny but then again Australian TV is usually shithouse. She was in a lot of failed Pilots but suddenly made it big in the US playing the fat chick jokes. Then again Amy Schmar was going to fucking play Barbie so your standards there are even worse

As for suing the Tabloids, fair enough, they are probably completely full of shit.
There were some great Aussie movies in the 90's. There's a good mini Time Travel one I found the other day called 'I'm you, Dickhead' if you want some decent Aussie Humour.