OK, so now I have found I can force LR 2.7 to write the changes to the XMP file when I am in the develop module using Ctrl/S (Win 7). When I do this, I get a message saying the file has been changed by an external application, and do I wish to overwrite it?
This is strange, because I have no external application which would write to the XMP. I only have PS Elements, and I never use ACR. Still. at least I have been able to update the XMP manually.
John