OK, Further details on this problem.

I got the Knoppix Hacks book today, which comes with knoppix 3.4 on disk.

I Fired it up and hey presto it recognised the hard disk correctly, as well as the CDRW.

Seems like maybe there's a bug in the 3.7 release or something has crept in since
3.4

I will test it on my laptop at work to see what happens and post the results.