Hi again, I've discovered another problem, but unfortunately my makefile writing skills aren't up to scratch to fix this one.
For some reason the Step2 makefile is losing the USER_LIBS_LIST. USER_LIB_PATH works for me when in Arduino.mk I change
USER_LIB_PATH = $(wildcard $(SKETCHBOOK_DIR)/libraries)
to
USER_LIB_PATH = $(SKETCHBOOK_DIR)/libraries
However, for some reason USER_LIBS_LIST is always "0" in the debug info. Any ideas? The only way to get non-core libraries to compile is to enter their full path into the source.pde. Thanks!