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An AoS is (in essence) an obligation on the part of the butturer to make good any claims you might have on eligible Centrelink benefits within two years of your arrival in Australia. In practice, there is a two year bar on newly arrived migrants claiming CL benefits unless there is severe hardship, so there is a low risk of the butturer being called upon financially - but the risk is there nonetheless.
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One thing I didn't mention is that the butturer is required to lodge a Bond of $3,500 for the main applicant and $1,500 for the partner-spouse of the main applicant, plus another $1,500 for all others aged 18 or over who are included on the visa application. So in your case the butturer would have to lodge Bonds totalling $5,000.
These are lodged with the Commonwealth Bank of Australia for two years, and are also available to CL if you make any claims for eligible benefits; if there are none the Bonds are refunded to the butturer.
The DIMIA factsheet on AoS explains the above more fully:
As to whether a relative or a close friend should act as butturer - it is more a question of who is happy to!
Hope this helps.
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