Below is the emails exchanged between myself and the agent last June:
Many thanks for your email. As the current legislation stands there will not be a problem with this as long as you have lived in Australia for at least 12 months then we can apply for the extension of the 12 months.
On 9 June 2010 03:58:
I just wanted to double check that our plans are still valid, we activated our 475 SA state sponsored visa at the end of Jan 2010 (it has a requirement that we live in SA for 2 years and work for 12 months), we plan to move in early Jan 2012 to Adelaide when we will have a year left on our visa, we then plan to apply for the year extension so that we meet the 2 year minimum requirement of living in SA before applying for our permanent visas.. you don't forsee any problems with this plan do you?