Adam Gilchrist (48) and Ricky Ponting (47) put on 69 from 29 balls before Andrew Symonds and Cameron White accelerated in the latter stages.
Australia plundered 14 sixes in all, another record in this format.
When England batted, they collapsed to 78-6 before Jamie Dalrymple (32) and debutant wicket-keeper Paul Nixon (31) took them up to a total of 144-9.
LATEST ACTION (All times GMT)
By Martin Gough
20th over: There are three balls left as Anderson comes to the middle. At least you've not wasted your entire day following England. Nixon flick-drives Harwood over long-off for a one-bounce four. Anderson gets a single off the final ball and that's your lot. England still yet to win a game on this tour, which has now lasted two months. Highlights on BBC2 tonight if you don't have broadband.
20th over: WICKET England 138-9 (Panesar 1) Nixon tries to take a single to the keeper but Monty doesn't know which way he's going and it all gets a bit farcical.
20th over: Nixon hits the first six of the England innings, hoisting Harwood over cover. A single brings Monty on strike, to a cheer.
19th over: Brace yourselves. Here's Monty P, whose first-ball sweep for a single is a lesson to those who have come in above him. Highlights will be available on this website later and the first half will be well worth watching. 131-8
19th over: WICKET England 129-8 (Lewis 1) Lewis is made to look a little foolish as he goes down the wicket to drive White, misses and doesn't bother to avoid the stumping.
18th over: WICKET England 127-7 (Dalrymple 32) Dalrymple misses with a reverse sweep at a fulller ball from Symonds, falling on top of it, and umpire Parker sends him on his way.
18th over: Symonds has a bit of fun with Dalrymple, looping up a massive off-break. The crowd is starting to stream out now.
17th over: Cameron White, once considered the next Shane Warne and still aged just 23, joins the attack. He gets just enough turn and plenty of bounce to make flailing attempted shots look a bit silly but Dalrymple rocks back and lofts four over cover. England have made sure that the heaviest Twenty20 defeat remains the 100-run verdict they inflicted on Australia in June 2005. 124-6
16th over: Symonds switches to the Randwick End for his second spell. There are a couple of singles to get England half-way to the total. Dalrymple finally connects with a reverse sweep for three. 115-6
"When's the next flight home?" Mark T, in the crowd, probably emailing with a snazzy PDA
15th over: The ball isn't sticking for Shane (Stickers) Harwood as a Nixon reverse-sweep goes straight through his legs. Dalrymple goes aerial to cover then straighter for four. 107-6
14th over: Harwood returns to the attack, a reincarnation of Mick Lewis, if you remember him. Dalrymple takes a step and lofts him over cover and flicks to cover, where Hayden puts down another sitter. There's an element of can't-be-botheredness about this fielding display as Symonds signs autographs while Harwood runs in. Dalrymple has a shuffle acorss his stumps and flicks a boundary. Only 127 needed from the last 36 balls. 95-6
13th over: DROP. Nixon reverse-sweeps straight to short fine leg, where Harwood puts down the easiest of chances. Dalrymple avoids a stumping chance but is unable to make the sweep work against Hogg. He gets a single from a top edge. Nixon flicks through fine leg for four. 84-6
12th over: WICKET England 78-6 (Bell 22) Bell claims he didn't see a knee high full toss that moves in the air a little and takes out his off stump. Hilfenhaus is a former bricklayer, apparently, but he looks like he has a long international cricket career ahead of him. Figures of 4-2-16-2.
12th over: Nixon has a swipe at Hilfenhaus and Gilchrist leaps about as if he has itching powder in his box but umpire Parker spots that the ball brushes the batsman's helmet rather than an edge.
11th over: The man with the best initials in world cricket, left-arm wrist-spinner George Bradley Hogg, joins the attack and there are some ones and twos available on the leg side. Nixon tries his trademark reverse sweep without success. 76-5
10th over: Paul Nixon has been waiting 36 years to get off the mark first ball, flicking on the leg side. he has played more Twenty20 matches than anyone else in the world, with 35 appearances for Leicestershire in the domestic competition, including two winning finals. 70-5
10th over: WICKET England 68-5 (Collingwood 5) Collingwood looks to break the stranglehold with a swipe but it goes too high to clear the midwicket boundary, where White is waiting to help Hilfenhaus take his first international wicket.
9th over: Twenty20 was supposed to get rid of the dull overs in the middle, but Symonds is a master of the dull one-day over, bustling through with his off-spin to yield five singles and a two. 67-4
8th over: Hilfenhaus continues to get some good shape on the ball here and the batsmen just can't get him away. His bouncer is too high, though, and is given as a wide. Collingwood is squared up and then beaten by successive balls. 60-4
7th over: "Welcome to the crease, Paul Collingwood MBE," says a rather harsh stadium announcer. Symonds gets some turn when he wants it. Colly gets off the mark and the two batsmen swap singles. 57-4
7th over: WICKET England 54-4 (Vaughan 27) Vaughan attempts a reverse sweep at a straight one from Symonds and a promising innings is brought to a low-key end as umpire Parker confirms the lbw. Shades of Mike Gatting in 1987, although that shot's a little more popular these days.
7th over: Andrew Symonds joins the attack with the field now back. It's off-spin tonight, as opposed to the medium pace he purveyed during the Tests.
6th over: Tasmanian 23-year-old Ben Hilfenhaus gets his first taste of international cricket, starting with an outswinging yorker. Vaughan chips his second ball for a couple straight back over his head. Australia celebrate as Vaughan lofts a drive high to cover but umprie Peter Parker's arm is outstretched for a no ball. Bell inside-edges the free hit for four but they're given as byes. 53-3
5th over: That was clearly an intentional outside edge by Ian Bell for four to get off the mark. A canny piece of batting. Bracken mixes in some decent slower balls but Vaughan gets to a wider one to chop it to the boundary. 41-3
5th over: WICKET England 32-2 (Pietersen 11) If you have work to be getting on with, I'd suggest you get back to it. Pietersen steers to third man and calls for a silly second run as Harwood's throw comes in and takes the stumps off with the batsman a yard short.
4th over: Pietersen takes successive boundaries off the double-chinned Harwood, with a hook and a bullying lofted drive. The bowler comes up with a decent slower ball but the resultant leading edge falls safely. Vaughan's knee manages to get him around quickly to capitalise on a Hussey fumble at mid-on, then he turns one around the corner for four. 31-2
3rd over: Pietersen gets off the mark with a forced single on the off side. Vaughan is getting the chance to test his troublesome knee with some running between the wickets. He doesn't look too bad so far. That drive between point and cover brings back some long-lost memories too. The out-of-form England captain, who has never been any good in one-day cricket, is looking pretty darned good at the moment. 16-2
2nd over: Remember the swivel pull that brought Vaughan three centuries during the last Ashes series? We haven't seen it for a while but that was the first boundary of the innings. 10-2
2nd over: WICKET England 5-2 (Flintoff 0) Just when you thought the only way after the Ashes was up, Flintoff falls for a duck. The bowler is Shane Harwood, a burly 31-year-old debutant who is a bit of a Twenty20 specialist. Flintoff top-edges a pull straight to just in front of square, where White takes a simple catch.
1st over: Andrew Flintoff is the new batsman facing, and defending, the last ball of the over. 4-1
1st over: WICKET England 3-1 (Joyce 1) Joyce looks to go over the top but gets a leading edge high to mid-on, where Mike Hussey takes a running catch. Just diving into the record books to find the biggest margin of defeat.
1st over: Joyce gets off the mark first ball, steering a single to third man, where new boy Ben Hilfenhaus fields. Vaughan scores his first international runs for 13 months with a flick off the hip.
1014: Master blasters Michael Vaughan and Ed Joyce take the crease. Nathan Bracken will open the bowling. His nickname, Andy G, is down to the fact he is a dead ringer for the host of the Australian Idol show.
1012: There are fireworks going off at the SCG between innings, as if there weren't enough from the Aussie batting line-up. Australia emerge in the smoke and it's pretty hard to see them in their grey uniforms. This is the specific Aussie Twenty20 uniform, emblazoned with the log of their sponsors, whose fried chicken is currently wafting across the ground along with the smoke.
"I've been watching the red-button stats (very good, by the way!) but I must say, I think I've discovered the most pointless statistic ever devised. The bowling analysis has a column for maidens. Yeah, right!"James Farrar via email
Innings break
20th over: Start the car. England have brought Anderson back for the final over. His three so far have cost 47. He starts with a good yorker but his second is on leg stump and White hoicks him into the 10th row of the stand for a record 13th six in the innings. DROP! Pietersen's electric hands strike again as he puts down White's mis-cued drive at midwicket. White doesn't trouble the fielders again as he swipes another six over the edge to complete the highest score ever in the 13-game history of Twenty20 internationals. A full toss yields a single and that's the end of the plunder. Figures of 1-64 from four overs by Anderson. 221-5
19th over: Fred's back, bowling to his some-time Lancashrie team-mate Symonds, with the run-rate having been effectively slowed here. White gives Flintoff the long handle through extra cover for four then takes two to long off to bring up the 200. Flintoff digs one in shirt to smack him on the face-grille but he gets a single anyway. 204-5
18th over: Collingwood varies his pace and line well to keep these batsmen to swapped singles. There's a well-run two of the fourth ball. Oops. Symonds flicks a low full toss over midwicket. Dalrymple is about five yards in front of the rope and the ball goes just over his head for six, equalling the record of 12 in a twenty20 international innings. 194-5
17th over: Lewis, who played in that match for Gloucestershire, gets deja-vu as White hooks his second ball through midwicket for six. Even when he plays and misses they take a single towards gully. Symonds was trying to go over midwicket but gets four though fine leg. 182-5
16th over: Symonds bludgeons Collingwood through the covers for four then flicks a low full toss for another boundary. White was the architect of the highest Twenty20 total ever, Somerset's 250-3 against Gloucestershire last summer. Colly keeps him in check, though. 168-5
"An excellent couple of overs there for England, who are by no means in a strong position but are getting themselves back into the game."Angus Fraser on Test Match Special
15th over: Cameron White should have been out there as he gets a thin edge behind to a leg-side delivery. Umpire Peter Parker doesn't give it, and White instead has to suffer Nixon's verbals from behind the stumps. 157-5
15th over: WICKET Australia 155-5 (Clarke 5)How could you ever think there is a single on to Collingwood at gully? Clarke commits suicide, Colly whips it in and Nixon completes the job.
15th over: J-Lew back in the attack, with Nixon standing up to the stumps. Clarke takes two to Dalrymple in the deep. They're not just crashing boundaries but putting the pressure on with every ball.
14th over: Collingwood is using the slower ball regularly to new batsman Michael Clarke, who gets off the mark with a couple. 153-4
14th over: WICKET Australia 149-4 (Ponting 47)Jon Lewis makes amends as Ponting is cramped as he attempts a sweep and gets an edge high to deep square leg. Lewis, who put Ponting down on 16, raises the ball to the crowd.
"Well done, the Montster. Now he's got time to work on his fielding."Geoff Lawson on Test Match Special
13th over: Panesar will bowl his entire quota in a single, marathon spell of four overs. Andrew (Larry Dooley) Symonds swipes him just wide of long on for a cracking six. The rest of the over is quick, flattish and full and Panesar taken an impressive 2-40 in his spell. 149-3
"How about a game of Ten20, with the Aussies only half the number of overs?"Wes Perry on email
Don't try to make text commentary any more frantic, Wes.
12th over: Time for a dose of Paul Collingwood, who was under-used during the Tests series. Or maybe not as his leg-stump delivery is flicked around the corner for four. The rest of the over is pretty tight, though. The Aussie skipper looks to swat over midwicket but doesn't quite connect. 139-3
11th over: Andrew (Roy) Symonds, the Twenty20 prototype, is the new batsman, getting off tghe mark first ball with a nudge on the off side. 129-3
11th over: WICKET Australia 123-3 (Hussey 18)Nixon sees the first action that will get his name on an England scorecard as Hussey waltzes down the pitch to Panesar, misses with a swipe and can't dive to regain his ground.
11th over: Hussey takes a step and hoists Panesar over midwicket for another six.
10th over: Off-spinner Jamie Dalrymple is the next lamb to the slaughter, although Ponting is unable to get after him straight away, with a mis-cued drive into the covers. Hussey drives through the covers for four. Ponting pulls off what looks like a check drive, which just sails over the long-off fielder for six. Amazing, breatless stuff. 117-2
9th over: Michael Hussey revese-sweeps his first ball, through fine leg, where a diving Anderson makes a hash of it. 105-2
9th over: WICKET Australia 97-2 (Gilchrist 48)Don't mess with Monty! Gilchrist tries to slog-sweep but gets a bottom edge onto his stumps. A 29-ball innings from Gilchrist that threatened to break all sorts of records.
8th over: Jon Lewis joins the attack. J-Lew? His bum's not big enough. Gilchrist takes a couple on the on side. Ponting gets an inside edge through the air to midwicket. Gilchrist slog-sweeps his fifth six to move to 47. Dot ball to Ponting. Could I just log the dots rather than the boundaries? They're more of an event. Ponting hoicks through midwicket for four more. 97-1
Martin Brackley emails to suggest a good one for James Anderson - Angry as in the popstar who sang "Suddenly". Remember Scott and Charlene's wedding? Jimmy's probably too young.
7th over: Montymania reaches Twenty20 cricket as the Montster takes over at the Randwick End with the fielding restrictions relaxed. There's a dot ball for Gilchrist and a lofted edge that falls safely in the covers. Normal service is soon resumed a Gilchrist lofts the fifth balll over long-on for six. 83-1
6th over: Gilchrist takes three successive sixes off the luckless Anderson from a couple of hooks and a crushing drive. Anderson finally finds a yorker to get Gilchurch off strike. You forget just how breathless Twenty20 is. Blink and you miss something massive. 73-1
5th over: Ponting is almost balletic as he swivels a pull shot into the crowd behind square but he has feet of clay next ball as he thick-edges four over point. A similar shot brings a relay effort by the fielders but the batsmen run four while they're faffing. DROPPED! Taxi for Lewis, who gets under a lofted drive from Ponting at mid-on and puts it down. He just dropped the Twenty20 international trophy. 52-1
4th over: Next in, Ricky (Punter) Ponting. Gilchrist shows his ingenuity with a wonderful late cut for four. Gilchrist then pushes the first single of the match and Ponting gets off the mark to backward point, where Pietersen is below his best. 34-1
WICKET Australia 28-1 (Hayden 20)Hayden tries to repeat the shot against Anderson, perhaps to a slower ball, and gets an edge to Dalrymple, running to extra cover.
4th over: Ladies and gents, we have our first six. Anderson bowls on the leg side for hayden, who hoists it over midwicket, into a crowd of kids wearing red teeshirts.
3rd over: Flintoff delivers a couple of dot balls before Gilchrist edges and Pietersen fumbles at point, allowing two. Flintoff digs one in to Gilchrist, like he did during the 2005 Ashes, and there's a wild swing. 22-0
"Johann" for Strauss"Clapper" for Bell"James" for Joyce"Morse" for LewisAdrian Lightly, via email
2nd over: Jimmy Anderson shares the new ball and Matthew (Haydos) Hayden steps back and gives it some humpty, over cover, bouncing and slowing but still hitting the boundary rope. Monty is fielding at leg-slip, which could prove good value. Hayden almost beheads Anderson with a blasting drive straight down the ground. There's a great big edge but it falls in front of deep square leg. A third four, blasted through midwicket. 20-0
"I have one for you - Steve Harmison - Wide boy"Ross Johnson via email
1st over: Andrew (Fred) Flintoff starts things off to Adam (Church) Gilchrist. A nudge on the on side first ball but he turns down the single, a leg-side wide then an upper-cut four over slip for a boundary. Flintoff is bowling to right-handers here and there's another wide but he then gets one through Gilchrist's gate, moving back off the seam. This is the same pitch as that used for the Test match so there may be the odd devil in it. 6-0
0830: Out come the umpires, Peter Parker (who looks nothing like Spiderman) and Bob Parry, followed by a fired-up England side, who huddle before captain Michael Vaughan for the first time in 13 months. Looks like he's cracking jokes in there.
Anthony Ive emails with some nickname suggestions:Monty - The PythonIan Bell - HamsterJon Lewis - Tesco
0829: Five Live's Arlo White follows up on Paul Nixon's cancelled benefit dinner by reporting that snooker star Willie Thorne and magician Paul Daniels' son were already booked to appear at the Walkers Stadium event.
0823: That Aussie line-up is frightening. Cameron (Bear) White, who hit 116 off 53 balls for Somerset last summer, is down to come in at seven. Andrew (Roy) Symonds was on a golf driving range with his cricket bat yesterday as a publicity stunt. Maybe we could handicap him in Twenty20.
0819: Not content with the nicknames they sported last time out in Twenty20, against South Africa a year ago, most of Australia's players have changed them for this match-up. Michael Clarke has ditched "Pup" in favour of the more mature "Clarkey", Adam Gilchrist is now "Church" after he was called "Alan Gilchurch" by a young autograph hunter. Mr Cricket is no more; welcome Michael "Huss" Hussey. He's spent too long in county cricket.
Text the BBC Sport website and the TMS team on 84040 (from the UK only)
0816: There is a DJ contest going on in the middle at the moment, with England's Judge Jules taking on an Aussie rival before some cheerleaders dressed in national colours. In the middle of it all is bemused former Aussie batsman Greg Blewett (keep it under your hat but he isn't much of a Twenty20 fan).
"It's been a difficult 2006 but it's nice to be back. The Ashes was a little bit of a disappointment but Twenty20 is a bit of fun and hopefully we can have a good win."It's nice to have Michael Vaughan back. I agree, the Ashes were a bit on the less-than-perfect side.
0807: Ponting, wearing what looks like a pair of pyjamas, wins the toss and decides to take strike first. He denies the quotes attributed to him from yesterday.
0805: Ricky (Killjoy) Ponting set a downbeat tone on Monday when he said he wasn't a fan of Twenty20. "My problem is that I can't play a game in which I'm wearing my national team's colours, and my opponents are wearing theirs, and treat it as just being fun," he said. England didn't think of it as fun when they smashed Australia at the Rose Bowl two-and-a-half years ago and set the tone for the Ashes summer. Australia seem to be going into this match undercooked.
0750: It will be nickname-tastic in Sydney today as Australia take on England for the second time in the shortest form of the game. The Aussies have continued their habit of wearing nicknames on the backs of their shirts (which are blue-grey rather than the usual canary yellow).
The early news is that Brett Lee (Binga; chest infection) and Mitchell Johnson (Notch; stomach injury) have been ruled out and that James Hopes (Catfish) and Shane Harwood (Woody?) have been drafted in.
England aren't very good at nicknames. If in doubt just add a "Y" or an "O". Paul Nixon (Nicco) is in behind the stumps with Chris Read (Ready) kicking his heals.
Nixon, 36, will be the oldest England debutant since John Childs (Charley), who was a handful of months older, when he faced West Indies in 1988. Michael Vaughan (Virgil) returns for the first time in 13 months, taking over the captaincy from Andrew Flintoff (Fred).
And there will also be a first appearance in England's coloured clothing for spinner Monty Panesar. What's that on the SCG Hill, is it the Montster?
Andrew (Brockett) Strauss, who was struck on the helmet during last week's fifth Test defeat, is rested so Ed Joyce at the top of the order.
Better nicknames for England, if you would, to the usual address.
Email the BBC Sport website and the TMS team on TMS@bbc.co.uk
