When I sat Air Law...... I remember there being something saying that to fly legally 2 of the following criteria MUST be the same.... Registration of Aeroplane, Country of pilots licence issue, and the airspace in which you're flying...
not true.
There is only one thing that is univerally true: To fly an aircraft registered in country A you need a licence issue by country A or accepted by country A.
Example: To fly an N-reg you need a FAA licence or a licence accepted by the FAA. For flying an N-reg in country B, the FAA accepts a licence of that country.
Other example: To fly a G-Reg (day VFR) anywhere, the CAA accepts any ICAO licence. So you can fly a G-Reg on a US licence in France (good counterexample for the "two-out-of-three" rule)
Other example: To fly a D-Reg anywhere, the German LBA does not accept any non-JAR licence. So you can't fly a D-reg in Germany on a US licence.
Airspace has nothing to do with it - only which licence the country accepts for flying its aircraft, and these rules vary country by country.
With JAR, however, all JAR countries accept without any further formality all JAR licences. So you can fly a D-reg on a UK JAR licence (not NPPL) anywhere in the world, since the licence is accepted by the German authorities. Again, airspace has nothing to do with it.