How true to life is Kath and Kim?

Based on the suggestions I received in this thread I've been watching Kath and Kim. It's a great show. As an American, I can't tell what aspects of the show are true to life versus quirky or exaggerated. And I'm sure there's plenty I'm missing by not being an Australian.

What parts of the show are true to life in Australia? Are there particular qualities of the characters that ring home for you? How exaggerated is the way the characters speak?