Some critics of first past the post want to see a more radical change to a proportional system (closer to elections for the Australian Senate), or a mixed system, with some proportional and some preferential by constituency.
Those in this latter camp, who think that the proposed reforms do not go far enough, are split in what to do. If they vote for electoral reform and it goes through, then perhaps the politicians will feel that they have "done" electoral reform and the chances of a proportional or semi-proportional system will recede into the background for another decade or more. Others think that at least preferential is better than the current system and they should take what they can get.
The irony is that if the referendum were to be held with a preferential vote on different options, the supporters of proportional representation would largely swing behind the more limited preferential reform as at least better than the current system. As it is, they are placed in the very situation that First Past the Post fails to account for and have to decide whether to vote tactically for their second preference or vote "no" in protest.
A similar thing happened in the 1999 Australian republic referendum, where opinion polls indicated a majority of voters wanted a republic, but disagreements over the specifics of the proposed model led to a split in the republican vote and the motion being defeated in every state. However, the current example has the added irony of being precisely a vote about how to reform voting, which might well lose due to the very factors that give rise to a desire for reform.
And, speaking of electoral reform, Jeremy reminds of the other electoral reform debate, which gets even less public attention.
If you've forgotten why voting "Yes" to electoral reform is important, see these seven reasons. I think that supporters of the new system frequently oversell their case, but it is still true that AV is a noticeably better system overall than FPTP.