Sort of a vague question, but I think I understand what you’re getting at. You’d need to use a WordPress Multisite installation, which will effectively create localized blogs on a subdomain (brisbane.example.com, perth.example.com).
Using a single site WordPress installation to do this is possible, using CNAME mapping on the domain, however this would not suit your goal as you won’t be able to post within the localized listing.
To achieve the subdomain for category “effect”, with the least amount of effort, you should use Multisite. I hope that answers your question.
A good rundown of getting Multisite going can be found at WPMUDEV. Hope this helps.
The WordPress.org version can be found at:
http://codex.wordpress[DOT]org/Create_A_Network
And this is the last bit of info you’d need to look at:
http://ottopress[DOT]com/2010/wordpress-3-0-multisite-domain-mapping-tutorial/
Cheers!
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