Just for completeness, I thought I'd post a followup with my results.
Short version for the A.D.D. among us.
Following the above-referenced link about removing the IT Policy works great on an 8700c, preserving all my data and applications.
Longer version with more details..
I installed version 188.8.131.52 of the Blackberry Destop Manager software.
I backed up my 8700c
Because I'm the paranoid type, I copied that backup file off to another machine; then I did another backup.
I downloaded the referenced policy.bin file, and followed the instructions for where to save it, and the regedit edits to perform.
I played (potentially) one last game of Spider Solitaire, just in case.
I disconnected the 8700c from the USB cable.
I removed the battery, and removed my SIMM. This step may not have been necessary; but I was trying to protect my data.
I put the battery back in, then did the "wipe handheld" step.
When the handheld rebooted, it asked me for a password. There did not seem to be a way around it. It required a 5 character password to be set.
I then connected it back to the USB cable. The DM recognized it.
I restored the backup I made before I started this.
ALL of my data and applications were restored. All my contacts. The icons on the home screen came back in the order I had them in. All the third party applications (MidpSSH, Googletalk, etc..) came back. It even rememberd the pairing with my Bluetooth headset.
I can now disable the password, and I can select a 1 hour security timeout period, where I could only select a maximum of 30 minutes before I went through this procedure.
There is no reference on the "Settings, Options, Security Options, General Settings" page to an IT Policy on my 8700c any longer.
So. As far as I can tell, my 8700c is back to the state it was in before I did the "wipe". The only difference is that it no longer asks for a password automatically after 30 minutes. It would seem that following the procedure as outlined does indeed work, and does preserve all your data and your applications if you do a backup and then restore that backup after the wipe.
As always, your mileage may vary, batteries not included, void where prohibited, some assembly required, caution - filling may be hot.