Oh well, serves me right for getting cocky and thinking I understood some of this stuff
But, having thought about this a bit more, one thing I don't understand: if the lift vector is tilted off-vertical, then surely there's less of if going straight up (sin of the angle off centre). Since thrust and drag are assumed to be along the aeroplane centre-line, then this must mean that if they're equal (and therefore cancel each other out exactly) then there must be more lift, not less....
Assuming that this is wrong, then the only other explanation I can think of is that the thrust does not equal the opposite of the drag when climbing or descending. Is that right???? Would explain the thing about 'excess thust causes climbing', which I've never really understood either.