Eventually settled on a Billion BiPac 7404VNPX. Specs are great for the price: FXO and FXS ports, DSL port and one of its four LAN ports can be configured as a WAN port, wireless N, and a USB port for a 3G modem. The WAN port option was good for me as am on Telstra cable; and if I move to somewhere that doesn't have cable the DSL port will then be useful.
Plugged the router in and selected Australia as the region in the SIP device parameters - there is no option for NZ. Am assuming that selecting Australia merely creates a default dial-plan and a few other settings suitable for Australia - we're not that different I suppose.
Plugged the POTS phones from the house into one of the two FXS ports, and the PTSN line into the house into the FXO port. The router has a function that checks the equipment voltage it is connected to and suggests what you need to set it to - did this. Checked the dial plan and made a couple of changes to ensure numbers like 111, 999, 911 are routed via the PSTN line out and set it for all numbers starting with 0 to use VOIP.
And it works fine. Will keep running as configured for a while and if call quality remains good will drop the PSTN service altogether. Appreciate it means that if the internet or Telstra cable service is out or there's a powercut I might not be able to dial emergency services - so am keeping the cellphone on all the time as a contingency and can always run next door to the neighbour.
Have attached two screen shots - one is the parameters for SIP, the other is the dial plan.
Getting the router was a bit of a chore as ozcableguy doesn't ship to NZ. So arranged with another supplier I'd used before to buy it for me and ship it - epowermac.com.au. Could have had it shipped to a friend locally, but shipping to NZ the product is sold less GST which pretty much covers the cost of shipping and epowermacs handling
Am not promoting Billion in any way over any other product. The point really is there are other options out there - and the ozcableguy site is really good for finding a product that suits. I figure that once I move off paying Telstra's $30/month fee for the landline, the saving will pay for the equipment in less than a year not to mention the lower cost toll calls to landlines and cellphones.

