Works fine for me on windows 7.
To play as the Aussie teams you go to X12 and select the team.
To play as the SA/NZ teams... well, if it's anything like when I've player 2004, you don't. Sure, you get to play in the NPC or Currie Cup but you don't get to play them at rep level
But having said that, maybe it's like the internationals and you get randomly picked. I've dominated the Currie Cup and haven't been selected, but then again sometimes I have been dominant and haven't been picked as national coach.