Received a new Motorola Defy today and popped in my old 2° SIM card and got messages such as "No Service" and "Emergency calls only" etc. I temporarily fixed this problem by choosing "Use 2G Only". However, everytime I turned 3G back on the service would be lost again and I'd have to switch it back to 2G and restart the phone. And yes I'm in the Christchurch coverage area.
A search on the net found some others with this problem, including an older locked thread in here which did not seem to conclude with a working solution.
In the Motorola forums someone suggested that using a micro SIM card solved their problems, so I went down to the 2° store and was able to swap my SIM details onto a new mirco SIM card for free which has solved the 3G problem. Yay!
Apart from that initial hiccup the phone seems pretty awesome so far. Good balance of specs and price ($536.50 delivered), the durable yet stylish compact design was the selling point for me and the official Android 2.2 shouldn't be too far off which should make it better still.