I am very sorry to say to every Thomas fan here in the UK that my prediction was wrong.
Season 1-3 on the 1-11 boxset are NOT restored.
I recieved my boxset in the post on Friday 23rd July 2010 which thankfully did come with the first 3 Railway Series books. I hadn't watched most Season 10 & 11 episodes for years and now I get to see them again in glorious clear DVD quality and in Widescreen!
I am fatefully disappointed that the restored prints of the early series (S1-3) are not featured, nevertheless, I have the first Eleven Series in my house with 288 episodes to enjoy!!!