"Hi Guys, i have worked out what it was, in exchange 2007 the active sync policy had require password un-ticked but had options selected for minimum password length, number of failed attempts etc ticked. Now these should not have been applying as the require password was unticked which blanks everything else out, so i ticked require password and cleared all the options then unticked require password again.
This has solved the problem and i have an active exchange mailbox synch with the never auto lock enabled.