Well that maybe the case in writing but it's not in practice (in my experience). as i said, I went along to the FSDO last week and got my foreign licence validated with a foreign medical from a different country. the form you fill out, and the FAA crtificate that was issued, clearly stated i had licence and medical from 2 different countries. no problem, no need for an FAA medical.
in regards to the ratings, i phoned the foriegn licence headquarters in oklahoma city because i assumed that i could only fly a 150 / 152 as per my ratings. when i enquired they said, and to quote (as i remember it clearly due to a pleasant surprise), "...absolutely no problem, you are authorised to fly any single engine aircraft subject to the hiring organisations checks and insurance once your licence is validated". When i spoke to them this time they weren't interested in the country of licence, it's as if it applied to everyone.
THIS IS MY EXPERIENCE OF IT.......as far as i can see the FAA make the whole deal as pain free as possible. any doubts, just contact the FAA:
http://www.faa.gov/licenses_certific..._verification/