Hey,
Australia is the 6th largest country in the world and one huge island with an area of just over 7.7 million km.
It is in a way part of the continent Australiasia, or Oceania, which takes into acount islands such as New Zealand.
AUstralia is considered as a continent as it sits on its own techtonic plate and has its own unique flora and flora.
Some characteristics of continents are these:
Areas of geologically stable continental crust, or cratons, tectonically independent from other continents
Biological distinctiveness, with unique animal and plant life
Cultural uniqueness
Local opinion that they are a separate continent
Obviously, the first three are scientific, and the second two are more subjective.
Check out sites such as -
http://en.wikipedia.org/wiki/Geography_of_Australia
http://www.countriesquest.com/oceania/australia.htm
http://www.bt-store.com/sitemap/HTML/travel_guides/desc/Sx2-2-GeoAreaID-1_au-TopicID-Geography/Geography.htm
http://www.answerbag.com/q_view.php/31968
Hope that helps! :)