UPDATE: Problem solved!
For those who come from the google after my post and are hoping to solve my same problem...
It was simple enough to do a factory reset as I hadn't downloaded any books, so I had nothing to lose from doing so. Amazon has instructions on how to remove ads (known as Special Offers/SOs)
which I'll include in this link here.
For some strange reason (the fact it was a gift/I'm trying all this from Australia? Maybe?) There was no option available to me to edit the special offers column as per the instructions and then unsubscribe from the SO system.
However, I got in touch over the chat system to an Amazon Support Representative who was more than happy to deactivate it for me. (I'd insert a link to the chat screen, but it was behind an Amazon login screen - so you need to be an amazon member to start the chat in the first place.)
What's more, for some reason they didn't charge me anything for it! Maybe because of my extra issue in the first place.
Anyway, with that issue resolved, it'll be easy enough to jailbreak the kindle again and readd the screensaver hack and wallpapers!
TL;DR: If you want a customised screensaver, but have ads on your kindle, get them removed first (the easiest way is by talking to Amazon, not by hacking your kindle), and THEN jailbreak it.
Lesson learnt!
