I think he's handling it just fine (though I do miss the days of the myspace updates). He keeps his personal life personal, his professional life wide open for sharing, and has enough "hobby" talk to provide a good interview. I imagine he gets noticed more in Hawaii than West Hollywood, but I don't see him appearing to be bothered when the cameras catch up with him. He seems to take it pretty much in stride. We have so many women scouring the Internet daily for pics of him, and I think the amount of papz-style pics we've seen has been fairly small. The airport pics are standard fare (esp at LAX - even I've noticed the papz there before), so he has to expect that. Besides, we haven't seen nearly as many pics of him and his new gal as we did when he was dating Holly (thank Bob!), so that must be nice for him (a more low-profile girlfriend). And let's face it, the man can't seem to take a bad picture, so he's got nothin' to groan about when he sees himself in a mag
(except maybe that Mr. Rogers sweater pic).
I don't know, I've never had any worries about him in this regard. He seems to have his head screwed on right as far as the publicity stuff goes.
Now if he gets the Bond gig someday... that's a whole 'nother level of fame. Then I might worry that it becomes too intrusive.
p.s. And I totally agree with
francis.
I assume Alex would like to be involved in more serious acting roles, but given his handsome face and beautiful, sexy body, Hollywood may not be interested in taking him more seriously. He would probably be able to accomplish a more well rounded career back in OZ. Oyster Farmer and Mary Bryant come to mind. Those were roles he used to show how well he can act. In Hollywood he has been touted more as a sex symbol (not that we don't benefit from that) 
but someone needs to give him an opportunity to shine professionally. As far as not wanting to seek fame....he had to know that if he became well known here he would lose a lot of privacy. There seems to be a contradiction between what he has said in the past and what he seeks. It's wonderful to be his fan and the thought of speaking to him and having a pic taken with him makes my head spin. But personally, I will never seek to do those things. (I have been in close proximity with him) He definitely has a dilemma in his career. He has made good choices in how he conducts his private life. I hope he doesn't HAVE to change too much. 
