Trawled many posts for a fix to this:
Arduino either says COM7 already in use, ... or ... sytarts uploading and hangs.
Turned out that under windows XP SP3 - with Tosh Bluetooth installed - there is a clash on COM7 (in my case)
DIsabled Tosh BT software, and deleted Bluetooth COM7 - Arduino now happy.
Just in case anyone else finds it useful.