ok, got it working... i was doing right but there are a couple of gotchas ive found:
a) I download from mobipocket, and they supply a large image version (26mb) and small images (13mb)... i of course tried the 26mb one, and that does not work as a dictionary!
the 13mb (which seems to be same as franklin) works fine!!
b) with the 13mb version, direct searching works fine and....
if you install on internal memory it will lookup across books,
if you install on CF , it will not!
i suspect this is something to do with, on the internal card, when you open any mobibook it doesnt create a subdir - but on CF it does.
btw, i had set the books to CF or Internal as appropriate
oh well, works