UK issued JAR licence holder could fly a D reg aircraft anywhere in JAR land....
no, anywhere in the world. The German authorities set the rules who can fly German aircraft, and they accept ("validate") any JAR licence for this purpose. Airspace has nothig to do with it. This validation is automatic, ie, no paperwork is required, and applies to all JAR licences and all JAR ratings.
But, for example, the holder of an old UK PPL/CPL couldn't??? (To answer JD's further question)
Day VFR only, again anywhere in the world. This is due to an old (pre-JAR) EU reg that all European countries accept ("validate") each other's PPLs for day VFR. Again no paperwork is required. The law actually says a PPL, so you are restricted to privae ops even if you have a CPL.
But an FAA PPL holder, for example, couldn't.
All the above is according to German law (para. 28 and 28a LuftVZO).
The equivalent regulations in the UK ar ANO 26 (4)(b) (validation of all JAR licence for use on G-Reg aircraft) and ANO 26 (4)(a) (validation of all ICAO licences for private day VFR operations). Note that the UK allows any ICAO licence for this, but Germany only accepts EU issued licences. You can read them up in CAP393.