The reason that it reminds me of That Deadman Dance is probably because it is about a pioneer settlement on the fringes of other early Australian settlements, and it involves Aboriginals. In That Deadman Dance, it was an Aboriginal that was cared for and became part of the white society, and then didn't fit in with either communities. Remembering Babylon is the reverse - it is about a young white boy who gets thrown off a ship whilst ill, and lives among remote Aboriginals in Northern Queensland for half his life. Once white settlement starts moving as far north as the tribe he is with, he ventures back to his own kind. But he has nearly completely lost the English language, and most of the English body language as well. It is about isolation, racism, and community. His very presence in the community divides it into two: those who will tolerate and in time love him, and those that are determined to drive him away (from fear of something different).
The voice of the narrator is very stable and removed, which distinguishes this novel even further from That Deadman Dance. Despite being distant (allowing quite lovely descriptive prose), the narrator often has quite profound insight into the characters (which is the only way that you get to know them well, because their description is not focused on). Having such a detached narrator really allows your own feelings to guide you, inside of being guided by a main character's feelings. I suppose this allows for a very broad range of responses to the novel, based on a reader's own background and sensitivities.
The narrator does take on some traits of the race of characters that the story is focusing on. The description of the landscape is very different when the characters are white (it is always a very hot, stark and feeling of being crowded-in by the bush) and when they are Aboriginal (there seems to be magic in the bush, as well as a peaceful silence). The only time that the whites seem to be clam in their surroundings is when they are at the house of the lady bee-keeper.
As well as describing the landscape magically, David Malouf also has some beautiful prose describing some of the cultural and spiritual aspects of the Aboriginal people. I have never read anything that expressed and explained another races' culture so well.
The only downfall with this short novel is that it just short of dribbles off into a nothing ending ...