You're confusing two separate things:
1. The Flash-based player does a geocheck before it starts playback (using
http://www.abc.net.au/tv/geo/iview/geotest.xml)
2. The Flash Media Server does a completely separate geocheck when the RTMP connection is being established. If it fails then the stream is terminated with an error (code = NetConnection.Connect.Rejected, description = AccessManager.Reject: Access denied!)
The X-Forward-For header appears to be honoured by
www.abc.net.au (running AkamaiGHost) but not cp53909.edgefcs.net (running Flash Media Server). So when you did the "Lifehacker method", the geocheck failed at step 1 and you saw the "overseas copyright" error. If you had somehow managed to continue past then point then you still would have been able to establish the RTMP connection because the geocheck would have succeeded at step 2.
The downloader programs skip step 1 completely and only do step 2 (after doing a separate HTTP request to retrieve the token). There is no geocheck on the token request nor is there a check that the token request and RTMP request originate from the same IP. This did not used to be the case - originally the geocheck was done during the token request and there was no check done by the Flash Media Server so therefore it was possible to use the X-Forward-For approach.
Therefore, as you said above, the only way to access iView programs from overseas is to use an Australian proxy or VPN. As far as I am concerned, their explanation of "copyright reasons" is absolute bollocks for the shows that the ABC actually creates themselves (I understand that there are special problems created by things such as news programs, where they are reproducing footage supplied to them by other agencies, but how can this apply to the 7:30 Report, Lateline, Australian Story, etc?).