I can confirm that is exactly what it does.

Also, 3.5G only shows up when its in use. For example with IM turned on my N900 mostly stays on 3G just switching to 3.5G when it needs to update. Not sure about 2.5G though as it rarely has shown up, it may also only appear when "in use" so its not simply a case of looking at the icon to see what is available, you have to be using data for it to be accurate.

Also if you are stuck with 2G/2.5G reception it seems most if not all people cannot receive calls while data is active. You are supposed to get kicked off data when a call comes in, but it doesn't seem to happen at least on many networks.