First of all, yes, bicycles do come in sizes, and fit is the most important thing in buying a bike. Height alone does not determine the corect size. Inseam length, arm length, torso length, flexibiliby, and fitness level are all important. Search this site and there are many links to fit calculators, but the only way to get a really good fit is to be fit by someone who knows what they are doing. Many local bike shops (LBS) can do this.
In your price range, do not even think about weight or frame composition. You are looking at an entry-level aluminum frame with Shimano Sora or Tiagra (if you are lucky) components, and inexpensive, heavy (but most likely durable) wheels.
The problem with the bike on the link is that there is not enough information provided to say anything about it. They do not list the frame size or geometry. Shimano makes a wide variety of components ranging from extremely cheap to extremely high end. From the price, they have to be low end, but how low? Grip shifters are usually only found on hybrids and mountain bikes. I had not seen them before on a road bike.
The main problem with buying a used bike is that you do not have the experience to know if the bike fits you. If you have someone who can help you in that regard, and you can inspect and ride the bike before you buy, you might get lucky and find a bargin, but if you buy a used bike on your own, you are likely to end up with a bike that does not fit you or a bike that will cost half again in repairs to get into proper working order.
Your best bet would be to check out some LBS and see what they have. The good news is that this is the time of year the 2007 models are coming out, and you might find a good deal on a new 2006. At the very least, you will find someone who can give you a good idea of what size bike you need and what adjustments to the fit will be needed. This would give you more information to go on while you continue to search for the right used bike.
I am not sure about UK pricing, but entry level road bikes from Trek, Felt, Specialized, Giant, and LeMond might be found for £400. They usually can be had for $600 to $700 this time of year.