"Class rating requirements & privileges on UK licences are now virtually identical to JAR ones except that it is restricted to UK registered aircraft."
Not strictly correct. The PPL priviliges are greater with a UK licence than a JAA PPL. You can fly IFR outside controlled airspace, wheras a JAA licence restricts the holder to VFR only.
The restriction to UK registered aircraft is a statement in the licence which is not strictly true. What it means is that the licence does not necessarily give you the right to fly an aircraft registered in another State unless that State agree. Not quite the same thing!
"You may however fly other JAR registered aircraft with day/VMC only privileges."
I think you are confused with flying UK reg aircraft on the basis of an ICAO licence!
To fly an aircraft from another State depends upon the laws of that State. For example you can fly an N reg aircraft in the UK with full UK licence privileges but only in the State of licence issue. In theory, you can fly any JAA reg aircraft in the UK, with full UK licence privileges; to fly it in another JAA State, requires the approval of that State.
The FRTOL remains vaild provided it is used. If it has not been used for 10 years then you will have to revalidate it by passing the written and practical test. LASORS 2003 para B1.6.