Simple question, complicated answer, starting with, "it all depends…"
Travel SIM cards enable your phone to connect with local networks to make phone calls and use data services in most of the countries you're likely to visit.
They include products such as TravelSIM, GO-SIM, WorldSIM and Woolworths Global Roaming SIM.
If you make only limited use of your phone overseas they offer a reasonably cost-effective solution, particularly if you plan to call Australian numbers. For example, in most of Europe, with the Woolies SIM card in your phone you'll pay $0.26 a minute for outgoing calls within the country you're in, $0.34 a minute for calls to Australia, and $0.45/MB for data.
The major selling point for these multi-country SIMs is convenience.
If your trip takes you through several different countries, in Europe or Asia, just one SIM card will get you through. One single number is also persuasive if you expect to receive calls from the folks back home.
If you are travelling to just one country, a much cheaper alternative is to buy a local prepaid SIM card. For example, the SIM Only card from Tesco Mobile in the UK gives you 1500 minutes of talk time within the UK and 500/MB of data, valid for one month, for just £10 ($21).
In most cases, these prepaid local SIM cards will not allow you to make international calls, however you still have the option of using your data allowance to make calls via Skype or Viber.
The worst answer is to do nothing.
Use your phone overseas as you would at home with your Aussie SIM card, and the bill will melt your credit card.