The career progression depends very much on how you do, and where you do it I think. Because it's public sector, any job you took up would have to be justified and would probably depend on market demand/available vacancy at the time. Having said that, I spoke to someone at Tower Hamlets last year, and they said that most people on the scheme were on 35k + after those two years, so I'd say career progression is pretty good. People do quite well off the scheme, I get the impression, and quite a few people move onto the Civil Service too with their experience.
You can indeed have varied placements. I'm not sure whether you get to choose - I don't think so, but it may depend on where you are and how many of your fellow NMTs are there. Having said that, my employer takes our interests into consideration, so you wouldn't be completely powerless, I don't think.