All sorted now! kind of... After hours of playing yesterday evening.
So I performed a factory reset and still no updates found, I also tried using 1.32.405.6 RUU to reload but this threw up Error 131: Customer ID Error and said I needed to download the right version for my phone (even though it was already running this version)! I also tried an RUU I found for the most recent Gingerbread version but had the same error.
Next, I thought I would try the RUU with a GoldCard to get around the CID check, but I was having no luck with this after endless tries using the GoldCard Tool and manually with the hex editor.
So finally I decided to just go for it and root, it all went smoothly and I'm now running the most recent LeeDroid and very happy with it so far (not sure which changes are Gingerbread and which are the ROM but all very nice).
All's well that ends well.