This helped thanks, but also I found I needed to:-
1) Enable MAPI access in Exchange 2007 by creating the Public Folders database (the setup routine suggests you sould not support Outlook 2003 clients by default, so does not create it - but that causes BES to fail on MAPI connect).
2) Add the Mailbox (not just AD) permission to the blackberry user mailboxes for BESAdmin to have AccessRights (not just ExtendedRights) of FullAccess. See the MS KB: How to Allow Mailbox Access
Cheers! If this really works I take a holiday, this should not be so difficult!