It is a good way to check as the dereg paper has the last 2 odo recordings on it in 2 yr intervals. So for example if it had an inspection in 2007 with 50,000kms and another inspection in 2009 with 65,000kms on it and you buy it in 2011 it would have around 80,000 km's on it going by the amount done over the last 4yrs. If you bought it and it had a lot less km's on it than around that, such as if it had 40,000kms, then yes it's a typical wind back job. Not all are like this though, that's the point of asking to see the dereg paper.
When I have time I'll scan one of my dereg certs so you can all see what I'm on about.
And it usually gets wound back after the auction not before. I've seen a lot of cars marked on the auction sheet as having "unsure" km's. I've even actually been to one of the big auction houses in Nagoya and seen it first hand myself, not them being wound back but the auction sheet stating unsure km's. The auction houses are very good with the records of car details.