PJ, you are right, there is a difference between an asylum seeker and an illegal immigrant.
In the case of an over-stayed visa, I would guess that the status of illegal immigrant applies when the visa runs out. That would make the entry to Australia legal, but the overstay illegal. Similarly, an asylum seeker entering Australia by boat is not an illegal immigrant.
While your response highlights the ignorance and xenophobia of the general population, it has little to do with the fact that most of the illegal immigrants arrive by air.