I got this working eventually......
I had to completely wipe my Apple TV to its factory settings. (Others may not have to do this but I just couldn't get it to work otherwise)
I reinstalled ATVflash and installed XBMC - this worked OK.
Then installed BOXEE - this worked too but I could then not get XBMC to work.....again this may be specific to my machine.
As it wasn't working correctly I used the ATV USB Creator and installed this way. This worked fine and I installed both boxee and XBMC.
I then got the plugins for TVcatchup and BBC iplayer and installed then into /mnt/Scratch/Users/frontrow/Library/Application Support/XBMC/plugins/video/
Good news is that Tvcatchup works fine. I can watch all live TV through XBMC. Result!
Bad news is that the iPlayer will not work. Menus etc come up but nothing happens :o(
However then I took a look at Boxee and there, nice and shiny was the iPlayer app. Tried it and it now works fine too (though a little stutter at times).
Thanks to those who replied and hopefully this may be of some use to others.