Yes, we use that system for our local electorates, but it's not called IRV here. Actually, we use slight variation: you number the candidates in order of most preferred to least preferred. Other than that, it is as has been described. In practice, many people either follow their party's "how-to-vote" card, or start with who they like least and work towards "1" that way. Have a rummage on [link|http://www.aec.gov.au/|The Australian Electoral Commision], in particular [link|http://www.aec.gov.au/pubs/factfiles/factsheet6.htm|this page] (upper house voting uses a different method). We get information every election about how it works and how your vote gets counted, etc.

I don't know now it would change US politics; there is an additional factor that attending a voting booth is legally compulsary in Australia.

Wade.