Well I thought I had it solved, then it returned on bootup.
I was running VNC server in the background for remote admin, removed this and it seems fine again (didnt think to mention it!)
I suspect this was the real culprit as it interfaces with something VNC mirror driver as a graphics device.
Paradroid: for me its an ideal setup I can run everything from very low res arcade game to street fighter iv in 1600x1200 at authentic resolutions and refresh rates - I will try and capture some decent stills later on, but I am very happy with the hlsl effects.
here is my current config:
#
# DIRECT3D POST-PROCESSING OPTIONS
#
hlsl_enable 1
hlslpath hlsl
hlsl_ini_read 0
hlsl_ini_write 0
hlslini %g
hlsl_prescale_x 0
hlsl_prescale_y 0
hlsl_preset -1
hlsl_write
hlsl_snap_width 2048
hlsl_snap_height 1536
shadow_mask_alpha 3.0
shadow_mask_texture aperture.png
shadow_mask_x_count 320
shadow_mask_y_count 240
shadow_mask_usize 0.09375
shadow_mask_vsize 0.109375
curvature 0.0
pincushion 0.02
scanline_alpha 0.75
scanline_size 1.0
scanline_height 0.7
scanline_bright_scale 1.0
scanline_bright_offset 0.0
scanline_jitter 0.05
defocus 0.0,0.0
converge_x 0.0,0.0,0.0
converge_y 0.0,0.0,0.0
radial_converge_x 0.0,0.0,0.0
radial_converge_y 0.0,0.0,0.0
red_ratio 1.0,0.0,0.0
grn_ratio 0.0,1.0,0.0
blu_ratio 0.0,0.0,1.0
saturation 1.3
offset 0.0,0.0,0.0
scale 1.0,1.0,1.0
power 1.0,1.0,1.0
floor 0.0,0.0,0.0
phosphor_life 0.4,0.3,0.3
yiq_enable 0
yiq_cc 3.59754545
yiq_a 0.5
yiq_b 0.5
yiq_o 0.0
yiq_p 1.0
yiq_n 1.0
yiq_y 6.0
yiq_i 1.2
yiq_q 0.6
yiq_scan_time 52.6
yiq_phase_count 2
Nothing over the top, scanlines, very slight pincushion and some over saturation (remember to switch video to d3d to enable hlsl)
info on GM + VGA monitor here
http://forum.arcadecontrols.com/index.php?topic=112869.0pics to follow...