Thanks for replying Dave...
It's simply a workgroup, I would also say it's a windows problem but thought maybe one would have come across this problem before using SME.
Bascially I have a ibay which has a group to allow one person RW access and everyone else as R access, once the RW access person uploads from his files he created on his windows XP pro machine to the server no-one else can see them, the RW access person then has to re-create the folder ON the server and cut & paste there files...
I shall try this on another setup and see what that give's me