Third time's the charm? Firmware 2.70 was released today.
2.70 has for me fixed both the setting saving on device problems (and I don't have to use GC, I reset the device manually to test this) AND my speed/cadence connection issues.
I did have trouble getting my device to update from 2.6 to 2.7. Garmin Express would claim that my device had already been updated, even though the Edge 25 didn't display a "software update ready to install" screen through several reboots. In the end, I connected it to my laptop, which is a mac, and that installed the update correctly. Hopefully this is something specific to my desktop PC and not more widespread.
But you know what? All is (mostly) forgiven, as my device finally works as well as it did when I bought it.
Best of luck to everyone else, please post your experiences.