Not 100% sure, it but seems like I don't have this problem anymore. The problem was still occurring after I took the last iTunes update (10.1.2 (17)). The only thing of possible significance that I can think of that happened later on was that I had to accept the latest iTunes terms and conditions while I was away and dependent on my iPhone, so I accepted them via the iPhone.
Anyone else noticing that the problem has disappeared?
It seems as though this problem has been fixed. I consolidated my library after noticing my apps were split over 2 different locations and the problem was instantly fixed.
This could just have been a coincidence however and the problem may have been fixed by Apple 'their end'.
Whichever the reason I'm just glad it's now fixed 🙂