It's possible. Some of the things you were told were clearly incorrect (i.e. not being able to roam outside Germany). It could also be the issue of a language barrier. I could easily see a salesman wanting to err on the side of caution when it comes to expensive data roaming, as he doesn't want an angry customer complaining about an enormous bill or having their service shut off for lack of funds if he explained it incorrectly.

It could also just be ignorance about prepaid product offerings. I actually sold wireless service at the retail level while in college, and while I considered myself to be more knowledgeable than most other reps on postpaid plans, which constitute the majority of cell phone usage, I knew almost nothing about our prepaid service.

So I'll be arriving in FRA (3days in fra, 3 days in muc). So I'd like to buy a prepaid micro-sim card for data (maybe 1gb) with some voice for the occasional local call if needed.
From reading this thread, it sounds like I can goto Fotec or O2 or a Ortel vending machine. I can also buy a Blau card online and have it shipped to me for about 20EUR. However, they all seem to use a less than stellar network. However, I will mostly be going to tourist type places in Frankfurt (might go out to Darmstadt) and Munich.

What would you recommend?

Does anyone know what the situation with buying nano-SIM cards is now at the airport? I've been recommended the Vodafone prepaid plan here: http://www.vodafone.de/privat/callya...ya-tarife.html and am hoping to get a SIM for an iPhone 5. Thanks.

Not sure about FRA but most supermarkets only sell regular and micro. No nano unless you go to a real phone shop. You may want to bring your own nano cutter.