Well I have tried just about everything - trashed the preference file, optimised the catalogue, updated to the new 3.5 version and even the new camera raw version and still seeing the same error on this particular export preset (and only this one preset)
Amazingly, one of my other export presets, with a different photoshop droplet action is working just fine; so I feel the issue is related to the specific export droplet for that specific preset (for whatever bizarre reason). To wit, I am deleting the preset and will recreate it - the 'blunt instrument' approach