Thanks for the reply. Yes I installed BD to a different directory (not within program files) - which is probably why I haven't experienced some of the problems I've seen in other messages on mobileread.
I've since experiemented a little more and it seems BD is losing references to images embedded within documents under certain conditions. This used to work - i.e. I used to be able to screen scrape a page from firefox/IE and copy into word, save as an Office 2003 doc and then run through BD to produce an lrf. However it now seems that the image link is lost when loading into BD. Not sure whether this is BD, Office 2007 or Vista at the moment :-(