We were nominated by NSW RDA Illawara, they facilitated an information session and we were advised na we are allowed to reside and work in a different regional area, there's also no need to inform them, but should the need arise I think it is only right and respectful to inform your nominating region of your intent to transfer to another area as well as stating the reason for doing so. Personally, we are planning to stay in our nominating region so as to avoid any complications that may arise during our PR (191) application and later on, sa Citizenship, I mean who knows, migration rules changes all the time.
This is for NSW only. I do not have any information on other states, however I've been seeing a lot of instances of people living and working in a region different from the one that nominated them.