A beanie in
Australia is a knitted
cap which covers the head and ears. In
Melbourne, the majority of beanies are probably worn in support of
football clubs, and often have a
pompom on top. These are made of
acrylic whereas real beanies are made of
wool, the better ones with an additional insulating layer underneath.
Elsewhere, real beanies are known as knit caps, Toques or "Benny hats, after a character in Crossroads, a bad UK 70s soap"1. They are very effective at insulating, since much bodyheat is lost via the top of the head. Melbourne can be quite cold in winter.
Beanies are often worn by stoners. Some stupid rich kid stoners wear beanies with a bright green marijuana leaf motif. In general, those wearing beanies in the city are doing so in winter and catching public transport and/or as mentioned before, they are attending a football match.
I am not certain as to why Australians call this kind of hat a beanie, but it is posibly because the ones without bobbles make you look like a bean.
Each June a beanie festival is held in the town of Alice Springs, NT. Local craftspeople as well as a fair few who have come from afar gather in order to display and sell their wares. Some of the headpieces available here are quite original in design, some stretching the deinition of beanie somewhat, but most are of very high quality.
1. wertperch