After spending 6 hours trying everything under the sun including permissions, .plists zapping the PRAM I think its sorted...
Right... here we go...
1. Restart your Mac and hold down the SHIFT key. This will start you Mac in SAFE MODE.
2. Open APP STORE and go to the STORE MENU and VIEW MY ACCOUNT.
3. Enter your username (email address) and password
4. Under the ID SUMMERY click the EDIT > (blue word) next to your Apple ID
5. You should see a line of text that says something like "To change your security question... click this link" APPLEID.APPLE.COM (
https://appleid.apple.com/cgi-bin/WebObjects/MyAppleId.woa/)
6. This wil take you to a webpage that has a few options on it... you need to click the one that says "MANAGE YOUR ACCOUNT >" (blue text on the right hand side)
7. You'll be asked to enter your username and password again... enter them and click "SIGN IN"
8. Right, this is where is get silly... Click on the "NAME, ID, AND EMAIL ADDRESSES" (left hand side in grey)
9. Click on the EDIT text (blue) next to "YOUR NAME"
10. Re write it again and click save (IF YOU HAVE ANY SPECIAL CHARACTERS LIKE & $ +* REMOVED THEM. and press SAVE (blue word).
11. I'm not sure if this helped but I also added a alternate email address (bottom of the page).
12. Go back to the APP STORE app and click on the PURCHASES button at the top and click on any of the PURCHASES (free or otherwise)
13. Enter username and password as/if prompted. and it should work. :O)
good luck and enjoy.