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However when I cashout from Neteller to my UK bank account or pay money into Neteller from my UK bank account I would incur this 1.9% fee for currency conversion PLUS I have no way of knowing prior to the actual transfer what exchange rate Neteller or my bank would be using to do the transfer.


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This isn't quite true, at least for the deposit to Neteller. When you deposit using the Neteller screen it asks you how much you want to deposit in $, it then asks what the currency of the account the money is coming from is in. It then tells you the exchange rate (taking 1.9% fee into account) and tells you the foreign exchange amount that the $ amount corresponds to at that exchange rate. You can back out of the transaction at any point. You then instruct your bank to transfer the foreign exchange amount to Neteller and Neteller do the exchange to $.

I haven't cashed out yet so I don't know if the same applies.