Thank you, thank you, thank you! I am delighted to say this has worked a treat. I had files in Seesmic (avatar filenames) and some thumbnails which were more than 16 characters.
Thank you for bringing this solution to light and thank you PhoenixFx for your handy little search tool.
I can now happily wait for FroYo to be released for my SGS in Ireland. Or do the registry hack if I get impatient