OK, I managed to get to the bottom of some of my issues - well, sort of...
I was unable to flash anything on a new 256MB CF card that I bought. However, my father came to visit, and had several compact flash cards to use with his digital camera. I tried one of his 64MB cards, and was able to flash various ROMS with this card - however, I was unable to flash any of the OSPACKs (it kept coming up with errors about a bad superblock), but was able to flash OpenZaurus / TKC ROMs without any problem.
Strangely, I tried to format both my own and his CF cards in his digital camera. While the Z picks up my own card for storage, it can't flash from it - only from the 64MB card. Therefore, I kept hold of this card.
However, the issue that I originally posted about started happening again, no matter which ROM I flashed with. I've currently got the TKC Rom installed, and again, when I use the keyboard, other applications start launching and cycling between each other, and if I am using a Terminal and attempt to use the keyboard, all sorts of crap starts spewing down the screen, issuing garbarge commands, etc.
There is no problem if I use the on-screen keyboard - however, this is torture when using a program such as Vim for text-editing. One of the big advantages of the Z is the ability to use a keyboard.
Therefore, I suspect that I have been sold (either intentionally or unintentionally) a defective Zaurus, as this is not normal, and can't seem to find any posts / info about anything similar....
AAAaaaaaaaagggggggghhhhhhhhhhhhhh.....................
Anyway, thanks for all the advice I've been offered on this matter.
Rgds
Neil.