Closing update to my initial post.
I resolved the problem by:
a. deleting the partnership between WMD and the device
b. uninstalling WMD
c. downloading (again and the same ver) and reinstalling WMD without the device in the cradle (oddly, installing WMD with the device in the cradle failed with WMD not finding the device)
The device now works fine. The only other problem (a problem that I've had before doing this same sort of thing) is that when the device and Outlook syc'd, the device ended up with duplicate of tasks, contacts and calendar entries. I guess next time I'll have to try and remember to erase all data on the device?
Although I have a post on the Outlook forum as yet unanswered, possibly someone in this group has an answer for the duplicated items in Outlook calendar. Is there a way within Outlook 2007 to clear all Outlook previously inserted holidays and then add them back as a quicker way of getting rid of the duplicates?