I did a little reading after being pointed in the right direction by you.
So, did this:
Uninstalled .net 3.5
Installed .net version 1.1
Installed MS XP Media Centre SDK - this was the file that I read I needed, containg the ellusive msasstate.dll file.
Installed .net version 2 - which then Vista told me I did not need and stopped installation.
Installed .net version 3 - Which Vista then told me helpfully - "You need to turn Windows features on or off". Which ones mate? I do love a generic error message.... I ticked all the .net ones and ran the installer as Administrator just to make sure. This failed again with the same error message.
Installed .net 3.5 - Installed without any problems.
Rebooted and installed some additional OS updates.
Searched for the msasstate.dll file.............. found it!
C:\Program Files\Microsoft\Microsoft Windows Xp Media Centre SDK\MSAS Sample\
Tried to enable the MiniDisplay in MP Config, and it failed with the same error. I then browsed to the folder and tried to do as requested, but it said regasm is not recognised as a internal or external comand.
Thankyou for taking the time to help mate - I suspected I may have to reinstall - I did not think I could get away with installation over the top of installation for as long as I have done already, and when I get a new drive, will do a complete re-install.