Yep. Way I understand it is that it's perfectly legal to fly a G-reg on an FAA PPL within the UK.
BUT you can't add anything to it (like ME, IR) and use those privileges in a G-reg. Need to fly an N-reg for that. And I understand that this is a UK-only thing: you can't fly a G-reg abroad on an FAA PPL.
Still, if you want to remain in the UK and fly VFR in SEP aircraft, an FAA PPL is as good as a JAA PPL. In this respect, an FAA PPL is more comparable with an NPPL than with a PPL. Anybody knows the approximate cost of an NPPL vs. a PPL?
Plus, this might all change when EASA takes over.