I work as an administrator for a group of preschools.
As earlier posters have told you correctly, most children become eligible for the government funding in the term following their 3rd birthday. There are a few areas of the country in which funding for 2 year olds is being trialled, but it's probably safest to assume you need to wait until your child is 3.
Currently in our area you are entitled to 12.5 hours of funded provision each week, for 39 weeks of the year (this will go up to 15 hours from September 2010). That said, an individual preschool may not be able to give you 12.5 hours, depending on how busy they are.
I wouldn't recommend leaving it until the summer before your child is due to start, because most preschools will already have allocated their sessions by then and you might find your preferred one is full.
Talk to as many people as possible and find out which ones other mums recommend. Go and visit them. A decent preschool will not have any problem at all with you phoning and asking to come and visit. If you're happy, get your child's name down on the list.
Make sure you find out whether putting their name on the list guarantees them a place. If it doesn't, get their name down somewhere else as well.
Depending on how busy your preferred preschool is, you may not need to put their name down at 18 months, but for others you might. Better to be prepared than disappointed!