Thanks for the comment Technofreak.
I have performed a number of deep uninstalls of all the Nokia components, registry entries, etc with no result. I have now also tried other Nokia phones and the same issue so it is definitely on this PC and not the N8.
We have a couple of other Win 7 64 bit PC's in the house now so I may try setting up dial up and Nokia Suite connections on one of them with the phone and see if it works - but this machine is the one I use and has all my stuff on so even if works with the others it doesn't really help and leaves me afterwards with the tiresome job of getting all the Nokia stuff off the other machine as it is pretty invasive

As I have said is not a big deal as this machine is on fixed broadband and spending some dollars for a wireless transceiver on it would be expected to work through the phone with Joikuspot anyway. Is just a puzzle?