Right, you had a question. We'll avoid our typical wishy washy disclaimer in which we explain that we don't practice law in Australia. From what little we know we're going to assume the rules are similar for the U.S. and Australia--unless of course Australia has passed some major cake exception to the copyright law. Yes, you are infringing copyright by reproducing the copyrightable image of the superhero on the cake. You are also likely infringing the trademark, assuming the comic book company (or whoever owns the rights) is claiming trademark rights. The owners of most superhero rights have licensed the use of their money-makers for cakes. It's possible that your use of "vintage" superhero imagery may exempt you from infringement claims if the work is old enough to be in the public domain. Trademark rights on vintage superheros are unclear -- it really depends whether someone is stil exploiting the merchandising right for the vintage character.
How do others get away with it? The big cake companies probably have a license to use the imagery. The smaller cake companies may be just getting away with it because the licensing companies haven't noticed or don't care enough to sue. If you're a small to tiny operation that's not likely to get noticed, then you can probably proceed with caution. Of course, there's always the possibility that by the time you proceed to a lawsuit, the evidence will have been digested.