They want "proof" though. I obviously don't have a receipt for the item when I had it new, so all I could provide them is the eBay sale.   They won't accept that though. They want COST price.

Someone's been taking tips from Royal Mail - they do this often to seller's of secondhand items (or so I've read on other marketplace forums, where the difference between cost and sale price on highly collectible items can sometimes be several hundred dollars). 

All registered items provided for up to $100 in content compensation of the $2.95 purchase price. This is why no compensation is payable on the contents and is payable on the postage only.

Bogus comment - registered was and is $3.20, but the $2.95 SOD option, introduced post-April 8 does not include $100 compensation. Guess even AP staff can't quite keep up with all their new, simpler, products and services...

In covering your last part of the previous response about scanning events, this has been updated as of 8 April 2013 when we started to roll out over 26,000 new scanners through our network which will provide for far more scanning events, which will assist the customer as much as Australia Post. The finalisation of this roll out will occur in 2014.

So, No matter what speed or size you choose, every parcel is tracked actually means

 No matter what speed or size you choose, every parcel is tracked.....it just might not be until 2014 sometime.