From an Australian's point of view, i have no woriies at all going to Bali. i will be visiting there later this year. The Australian government has had travel warnings for Indonesia on and off for many years and Bali was included in these for the irst time after the bombings last year. Its actually funny because in the one trip we are visiting New York and Bali. Whenever i tell someone of our plans, the first thing they say is "...you are going to Bali?" They never mention New York even though we all know what happened there. My advice would be to go given that at the moment there are still not large ammounts of western tourists on the Island. I know people that have returned recently and everyone says that at no time did they feel threatened. In fact it was quite the opposite with the friendliness of the Balinese.
Cheers