Thanks for the once-over.
I think I've tracked it down. (I've fallen for this before)
Bloody IE:mac cares about newlines in the source -
Code:
<div>hello</div><div>world</div>
will render differently to:
Code:
<div>hello</div>
<div>world</div>
even though as far as XML is concerned they are syntactically identical.
I hate you Gates.