Thanks for your comments on what is wrong and how to solve the problem. I really know very little about texturing and think i may have to do a couple of tutorials or something.

I played around with different kinds of projection mapping, i.e. planar, spherical etc... and they didn't seem to make any difference to the strange distortions. I was just fiddling with settings thoug, not really sure what i was doing!

How do I set it to automatic mapping if i was to try that?

Ben