Cleric Spell Preparation Clarification

This is a question to fellow testers/DMs on how to arbitrate the Cleric in regards to spells.

Both Clerics have it written down that they prepare one more spell than they actually have slots for per level, and "casting a spell" says it consumes a slot. Does this mean that the Cleric functions as a 3E spontaneous caster like a sorceror, having a pool of spells to choose from and being able to decide what his slots go to on the fly? Or does this mean that he has two slots to prepare from the list? It specifically says 'and' when mentioning what spells they prepare. 
I read it as the cleric can cast 2 spells per day at first level out of all of his prepared spells. So yes, it seems like a sorceror in terms of casting ability. He can cast 2 Healing Words, or 1 Healing Word and 1 Divine Favor, etc.
Wizard's first rule: People are stupid.
I asked the same question, since wizard seemed to be different than cleric at prep/casting.
The healing human cleric would have 3 spells prepared. Then he has 2 slots. He can cast any two of his spells  each casting taking up one slot.
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