I managed to convert the index configuration for sitecore ContentSearch API. Looking at Sitecore default index configurations was a great help for this.
Note: As also mentioned by Stephen, <include hint="list:IncludeTemplate">
does not work in Sitecore 7.0 initial release. It's fixed in Sitecore 7.0 rev. 131127 (7.0 Update-3) and I'm planning to upgrade to it.
Here's a good article on sitecore 7 index update strategies by John West. It'll help you in configuration your indexes the way you want.
Converted configuration:
<sitecore>
<contentSearch>
<configuration type="Sitecore.ContentSearch.LuceneProvider.LuceneSearchConfiguration, Sitecore.ContentSearch.LuceneProvider">
<DefaultIndexConfiguration type="Sitecore.ContentSearch.LuceneProvider.LuceneIndexConfiguration, Sitecore.ContentSearch.LuceneProvider">
<IndexAllFields>true</IndexAllFields>
<include hint="list:IncludeTemplate">
<!--Suburb Template-->
<suburb>{FF0D64AA-DCB4-467A-A310-FF905F9393C0}</suburb>
</include>
<fields hint="raw:AddComputedIndexField">
<field fieldName="search text" storageType="NO" indexType="TOKENIZED" vectorType="NO">OurApp.CustomSearchFields.SearchTextField,OurApp</field>
<field fieldName="display name" storageType="YES" indexType="UN_TOKENIZED" vectorType="NO">OurApp.CustomSearchFields.LongNameField,OurApp</field>
</fields>
</DefaultIndexConfiguration>
<indexes hint="list:AddIndex">
<index id="GeoIndex" type="Sitecore.ContentSearch.LuceneProvider.LuceneIndex, Sitecore.ContentSearch.LuceneProvider">
<param desc="name">$(id)</param>
<param desc="folder">$(id)</param>
<!-- This initializes index property store. Id has to be set to the index id -->
<param desc="propertyStore" ref="contentSearch/databasePropertyStore" param1="$(id)" />
<strategies hint="list:AddStrategy">
<!-- NOTE: order of these is controls the execution order -->
<strategy ref="contentSearch/indexUpdateStrategies/onPublishEndAsync" />
</strategies>
<commitPolicy hint="raw:SetCommitPolicy">
<policy type="Sitecore.ContentSearch.TimeIntervalCommitPolicy, Sitecore.ContentSearch" />
</commitPolicy>
<commitPolicyExecutor hint="raw:SetCommitPolicyExecutor">
<policyExecutor type="Sitecore.ContentSearch.CommitPolicyExecutor, Sitecore.ContentSearch" />
</commitPolicyExecutor>
<locations hint="list:AddCrawler">
<crawler type="Sitecore.ContentSearch.LuceneProvider.Crawlers.DefaultCrawler, Sitecore.ContentSearch.LuceneProvider">
<Database>web</Database>
<Root>/sitecore/content/Globals/Countries</Root>
</crawler>
</locations>
</index>
</indexes>
</configuration>
</contentSearch>
</sitecore>