Can anyone tell me if keeping my N900 in 2G (unless I am specifically using data and need 3G) is actually going to save me battery?

Yes ! 2G is better for battery life.

Ya definitely it will save battery

Look here.

vi_ is right - on top of that, I would say "dual" mode is the most battery-eating. 3G, obviously, show higher usage in tests, but it's hardly noticeable in real life, if You're on area with good coverage.

BTW, it's worth to mention, that even in "high mobile Internet infrastructure" countries, there is generally better 2(.5)G coverage, than 3G, so 3G may suck more battery, just because weaker signal reception.

/Estel

Mine is always on Dual, what does it really mean? I don't really think it bad on Battery, doesn't it just convert to 2G when 3G is not available?

It probes both network simultaneously - that's also why You can have both data connection with high bandwidth usage and non-interrupted calls. Generally, it is't overkill - becomes grand power sucker while traveling through regions with changing signal strength (both 2G and 3G is probed intensively), or when one (or both, obviously) range is barely reachable (low 2G or low 3G signal).

As a rule of thumb, it's better to sit on 2G, and enable 3G (even in dual) when You need data connection. In some special cases, it's also good to use 3G only for calls - they're much better encrypted, as 2G was broken long time ago (yet, it's not trivial, so You can rather don't expect script-kiddies eavesdropping conversation, even on 2G). Overall, eavesdropping 3G is *much* harder, and require *very* specialist equipment, and/or cooperation from Provider, where 2G theoretically can be decrypted by tech-savvy hobbyist, with some special (still expensive, if hobbyist in question isn't tech guru and haven't DIY it) equipment.

/Estel