It turned out being something to do with the ATI HD card's driver or 64 bit driver that didn't like PS 3.0 being used with VS 2.0 in the shader code (Not sure if it is just a 3DGS thing or not, but I am guessing not). When we changed the shader code to use PS 3.0 and VS 3.0 it seemed to resolve the issue.

So basically all we changed was VS 2.0 in code to use VS 3.0 processing instead.

Anyhow, sorry for getting all stressed there, was a bad day.