Currently Being ModeratedJun 19, 2012 7:18 PM (in response to PaulWR)
Okay I found the fix. Firstly it was not actually locked - I realised it couldn't be since it was still receiving calls and sending/receiving texts. Locked would give the SIM warning at the unlock screen.
So... eventually, Restored the phone and set up as a new iPhone instead of from backup. No more problem. Must have been corrupt backup files, so deleted all those from my Mac and have started from scratch with the new setup.