Again, I've been able to find just bits and pieces of information about this looking all over the place. From what I found, living in Palau is fairly comparable to the USA, maybe in the midrange of US cost of living...more than the country but less than a big city. Again, this is just based on pieces I've put together after a lot of searching, and I'm not sure how up to date it is. The stupid American television show Survivor:Palau may have spurred tourism and increased prices 
I'm not sure how American cost of living compares to Australian. I live on $1,700 USD/month in a cheap place of the country. A big city could easily cost 2-3 times as much. I'm hoping to eventually relocate to Palau when my income goes up to about $3,000/month, when I get another pension I'll have coming to me and an inheritance (which I'm not wanting to come any sooner than it has to!).
-mike