Thankyou Roger for the response please see my reply's below.
Are you using a voltage divider from TX on the Arduino, otherwise you are giving the ESP-05 too much voltage on its RX pin
YES
Although it may work for a while you stand a chance of damaging the module if you don't use a voltage divider
N/A
When you say you powered up the module, what did you power it with, the 3.3V from the Arduino doesn't deliver enough current to guarantee correct operation of the device as it takes between 50 and 200mA when working, which is more than the Arduino can supply.
NO if you read my post you'd see i stated it was exteranlly powered. and YES with 3.3v
As you can't easily access any of the GPIO lines in order to upload new firmware etc into the module, you are really stuck with whatever unknown firmware came with the module.
THERE IS A PROCEDURE FROM THE MANUFACTURER FOR FLASHING.
If its the Old AT command set version, it works at 115200 but the new one I think defaults to 9600 (but can be changed with an AT command)
Personally, I would not buy this module because the lack of connections makes it very limited and problematic to use.
I BOUGHT THIS MODEL FOR 2 REASONS 1 THE EXTERNAL ANTENNA, 2 PRICE.
ESP-03 seems quite popular and if you want to do anything apart from connecting to the Arduino, you need a ESP-12 or similar, as even to use low power mode requires access to more of the GPIO pins.
THIS UNIT WILL CONNECT TO ANY SERIAL DEVICE.
and the ability to reflash the firmware is virtually essential at the moment as it changes all the time.
THERE IS A PROCEDURE FROM THE MANUFACTURER FOR FLASHING.
If you have a very steady hand, you could solder extra wires directly to the device (I had to do this on an ESP-01 and and ESP-03) but its very hard to do !
THIS MODEL IS ABOUT THE SIZE OF A THUMB NAIL THE TRACES BARELY WIDE ENOUGH TO SEE WITHOUT MAGNIFICATION. I'VE HAND WIRED QUITE A FEW BOARDS IN MY LIFE BACK IN THE PRE-PC DAYS WHEN WE ALL BUILT OUR OWN BOARDS. I WOULDN'T ATTEMPT MODIFYING THIS RASCAL. KUDOS TO YOU FOR BEING THAT STABLE
Bottom line I fould the issue; there was a jumper missing on the breadboard tying the uno ground to the external 3.3v supply ground. Since the uno was being powered via the usb cable there was a difference in ground potential and of course noise. Thanks again.