lol I was going to suggest Rong Bao Tang in Chinatown on Dixon St but someone beat me to it! When I still bought Japanese CD's I'd always go there... it's been a really long time though because now I just order my CDs online. But anyway, I've seen tonnes of Japanese CD shops around Chinatown. I tihnk there's another Rong Bao Tang on Thomas St near Market City too.

And off-topic, I love Melbourne! I'm a Sydney girl, but I could convert to a Melbourne girl anytime haha

PS: Rong Bao Tang's CDs (well at least the Ayu ones) are all authentic (they've got the authentic serial codes on the side, AV-something something). CD+DVD albums sell for more or less about $30 each... which isn't bad considering you don't have to pay for postage and handling. I only order online cos I'm too lazy to actually buy at the shop LOL. As far as I know though most of the Japanese DVDs are overseas versions.