Are there any major problems getting NZ licences converted to JAA. Yes - you can't do it. You will have to pass all the JAA ground exams, the CPL Skill Test (after training at the discretion of the Head of Training) and the IR Skill Test (after a mandatory 50 hour course of training).
Would a New Zealand Instructors rating have any relevance in the UK None whatsoever - you'll still have to do a FI course and pass the flight and ground tests and you then only get a FI(Restricted) rating.
Actually it's not the UK CAA's fault. Put the blame firmly where it rightly belongs - with the JAA bureaucrats, who make the stupid rules, and that bumbling oaf Prescott who insists that the UK CAA implements them in full. france, meanwhile, implements those parts which suit her and ignores those parts which don't. A truly marvellous thing, this harmonisation.