Well this gets even stranger
Was in the school on Saturday so unplugged ActivExpression unit - no difference
Then moved the PC next door (where teacher is using exact same make/model PC with slightly newer whiteboard). Made no difference.
I concluded it had to be software issue. So I reimaged the PC from scratch.
Logged in as local admin, fired up AInspire and it was fine - problem appeared to have gone.
However, teacher contacted me this morning to say she had logged in and the issue had returned....
We use roaming profiles with redirected folders on the network, but I can't think of anything in her profile that could be causing this...