Work experience, internships, and other unpaid arrangements - Are they work?

It's increasingly common for junior or trainee employees to be asked to undertake some sort of unpaid time as part of their entry into employment. So, when is it legitimate not to pay for work time?

It is clear that traditional work experience, usually by school students, isn't "work," because although the student might undertake some tasks, those tasks generally don't substitute for having a paid employee do the work, and the engagement is usually for a strictly limited time, and an educational experience rather than work in its proper sense. On the other hand "interns" doing work which paid employees would otherwise be doing, would usually be entitled to payment in accordance with an applicable award, for at least the Federal Minimum Wage.