Federer returns to Melbourne Park as the overwhelming favourite and defending Australian Open champion, one of three majors he won while compiling a 92-5 record last year.

Four of his losses were against second-ranked Rafael Nadal, including the French Open final when he won the first set before going down in four.

Federer was the first man since Rod Laver completed his second Grand Slam in 1969 to make the finals in all four majors in a single season.

But that was not quite good enough for the 25-year-old Swiss star. Federer skipped his regular season-opener at the Qatar Open, deciding he needed a breather.

``You have to look at the big picture,'' he said. ``I wanted to have a life, you know, have Christmas and New Years' and come here rested and not exhausted already.

``For me, it was most important to come to Melbourne in the mood to win the Australian Open, not come here and feel like it's a pain.''

He did some work in Dubai, then arrived in Australia a week earlier than usual.

After a patchy first match back, coming within two points of defeat against Radek Stepanek, Federer advanced to the final of the exhibition Kooyong Classic with a convincing win over 2005 Australian Open champion Marat Safin.

He believes three matches is all the fine-tuning he needs.

``I'm probably playing again on Rod Laver Arena,'' he said. ``I play so well on that court, and with my experience and the way I finished the season and the way I'm coming into this _ I don't see why I should be vulnerable. It's going to be really tough for people to beat me here.''

Federer received no favours in the draw on Friday. His third- and fourth-round opponents could be U.S. Open semifinalist Mikhail Youzhny and former No. 1 Juan Carlos Ferrero, while last year's surprise finalist, Marcos Baghdatis, looms as a quarter-final rival.

Andy Roddick or Ivan Ljubicic are semifinal candidates. Nadal also has a tough draw on the other side, having a tricky opener against Robert Kendrick, a possible third-round with Andy Murray and either James Blake or Lleyton Hewitt after that. And that is before possible showdowns with No. 3 Nikolay Davydenko or David Nalbandian.

Federer already has enough entry rankings points to ensure that by the end of February he'll break Jimmy Connors' record of 160 consecutive weeks at No. 1.

More important to him, though, is he'll know by Jan. 28 whether he is set up for another shot at the season Grand Slam.

``If I win here, it gets very interesting,'' he said. ``I'll know in a few weeks if that's a goal that I can give myself or not.''

While Federer's domination is daunting for the other men on tour, there has been no equivalent figure on the women's side since the demise of the Williams sisters.

U.S. Open champion Maria Sharapova stepped into the top-seeded position after Justine Henin-Hardenne withdrew from her Australian tour for undisclosed family reasons.

``I don't see it as putting any extra pressure on me,'' said Sharapova, who has made the semifinals or better at seven of the last 10 majors. ``Whatever you are seeded, you've just got to go out and play your matches.''

She will open against Camille Pin of France and the first seeded player she could meet is No. 30 Tathiana Garbin in the fourth round.

Defending champion Amelie Mauresmo said she was desperately unhappy with her form in a quarter-final loss to Jelena Jankovic in Sydney.

Mauresmo had her personal breakthrough last year, winning her first Grand Slam title after 11 years of playing at the majors. She followed that up with another win at Wimbledon and spent most of the season at No. 1 before slipping to third.

Sharapova's chance of finishing at No. 1 ended in a semifinal loss to Belgium's Henin-Hardenne at the season-ending WTA Championship. She was one of five Russian women seeded in the top 10.

The 19-year-old Sharapova warmed up at an exhibition tournament last week in Hong Kong, where she lost in the final to Kim Clijsters.

Clijsters, who made another final in Sydney this week, is determined to put up a big performance in what she expects will be her last Australian Open. At 23, she has decided she'll retire at the end of the year.

Martina Hingis has already retired and come back. The pair could meet in the quarter-finals.

The 26-year-old Hingis, a three-time champion and six-time finalist in Australia, returned here last year with a No. 349 ranking after three years off the tour, and reached the quarter-finals. She ended the year at No. 7.

She has a difficult opening match against 2005 semifinalist Nathalie Dechy.

Serena Williams no doubt has contemplated retirement amid all of her injuries, but thinks she can add to her seven Grand Slam singles titles. She won her last major here in 2005.

She'll be without sister and hitting partner Venus, who pulled out this week with an injured wrist.

With Federer being so dominant and with Andre Agassi in retirement, there's only three other players in the men's draw with multiple Grand Slam titles.

Nadal is one of those, with back-to-back French Open titles, and is growing in confidence on hard courts. He's also 6-3 career against Federer.

And Federer rates the muscular Spaniard as potentially his toughest challenger.

``For those who still haven't understood yet that he's a good hardcourt player, or even grass, they should start to wake up,'' he said.

Nadal retired in his first match at the Sydney International because of a groin strain, but only as a precaution, and is expected to be fit for Melbourne.