I have the same issue with my 05 D3. Drops of to much speed when hitting a hill. Even when setting the cruise control I cant just hit the + button and straight away remove my foot from the accelerater - if my foot comes off within about 5 secs of setting the speed then the disco just seems to coast down to about 5km/h slower and then it puts its foot down to get back to the set speed.
My old 99 volvo's factory cruise worked much better, maintained the set speed instantly and as far as its engine power could it maintained speed on hills that would have the disco dropping 5 or more km/h off the speed.
Cant see how its a fuel economy thing as mine seems to drop off the speed slowly (as if its been gentle on the accelerator) and then when it cant do that its all out foot to the floor (so to speak) acceleration to get back to the set speed. I would guess it would be more fuel efficent to maintain the speed with a faster accelerator response to the dropping speed



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