2/4 Wire Conversion Circuit For UK Telephone
I suppose really I don't understand how the line termination works
  and so therefore how to effectively remove the send signal from the
  transmit path.


Basically, a telephone handset works like this: -







simulate this circuit &ndash; Schematic created using CircuitLab

As can be seen the microphone amplified signal is split into two paths via 2 resistors R1 and R2. If R3 matches the real network line impedance at all relevant frequencies, then amplifier OA1 will only amplify the signal from the network and there will be minimal "sidetone" from microphone to handset earpiece.