What you need for Japan is a handset that includes 2100MHz WCDMA (that's one of the 3G standards). Google the phone model specs and you should be able to find it (or not, if it doesn't have it). Nothing to do with the SIM.
Yep, in Japan you can use wifi (if you have it on your phone or laptop) to Skype etc for very cheap. But doesn't help too much if people need to call you (are you going to wait in the hotspot on the offchance someone might call?).
There are rental phones available on arrival (in the terminal in Tokyo/Narita) if yours doesn't have the right frequency. Or you can get them from vRoam before you leave (also lets you keep your Oz number).