Judging by the various media releases on the subject to date, expect the LCC to be a greenfields operation built from the ground up with minimal involvement from Qantas HQ. The operating philosophy would aim to have the carrier come into the market 'underneath' DJ, and gain DJ (or low yield mainline) market share from below, and turn it inter higher yield, higher volume market. All routes currently operated by DJ would be fair game - anywhere there's a discount Y-class market lurking, you could expect to see the LCC deployed.
DJ to date have been keen proponents of low fares and 'opening up' Australian air travel. I'd assume they'll have no problems with this venture, then, assuming it proceeds.
ED