I have been speaking with the creator of the UTFT library Henning Karisen and it would appear that when I download the latest version from his site I am getting an old version, in fact a very old version. We cannot work out why this is happening but we only realised this when I sent him back a copy of the UTFT.cpp file which was 3 times the size of the current one. Henning was good enough to send me the latest version and I installed this just changing the TFT type......
Straight away the entire example program works flawlessly and it appeared a little quicker too.
So if it isn't working for you too then maybe it is an internet issue NOT a problem with the library itself.
If you think that this might apply to you then the latest version should have THIS as the last line of the version file...
2.01 05 Feb 2013 - fixed a bug that only shows up on linux-based systems
EDIT: I had placed the new library files into the library directory but didn't realise that the IDE was still using the modified CTE files I was using. When I removed all traces of UTFT, Utouch etc and replaced them with the ones from Henning it was no longer working. I have still not yet managed to get it to work so back to modified CTE files for the moment.