Sorry if I'm bringing up a relatively old topic.. well I don't consider March 2012 old but y'know, each to their own.
I think that reinstating passenger trains on the Geelong - Ballarat line would be beneficiary for the public. I've often sat at Geelong Station waiting for a train as the bus from Ballarat has pulled in and almost every time I've seen it, it has been full. People in regional towns along the way (such as Bannockburn) would benefit from this because there is little public transport access in these towns besides the V/line coach and the (infrequent) bus route that McHarry's operates Monday - Saturday. I've got a friend who lives in Teesdale (outside Bannockburn) and often complains that he needs to be somewhere but can't get there due to lack of public transport.
There is almost always a set of three Sprinters stabled behind the train-wash in Geelong Yards, so you could easily put them to use on the line until they're needed on peak duties on the Geelong line (I assume that's why they're stabled there) and as others have said, other sets that are ex-Melbourne could be used on the line. If I had it my way, I would run trains from Southern Cross to Ballarat, from Ballarat to Geelong and then Geelong to Melbourne and continue in that circle, and then the same but in the reverse. I don't know much about railway operations and timetabling but would that ultimately mean more trains for each line, depending on how long it takes to get to Geelong from Ballarat on the train?
Anyway, I think I'm just rambling on...