Hi folks...basically after a few hours or trying to fix this myself, I've reached no further than when I started, so here's the situation:
*Original blog hosted on wordpress.com
*Exported using WP's built in utility to a 4.7MB XML file i.e. WordPress eXtended RSS file
*New blog up and running, no changes whatsover, the original Welcome post + comment still there
*Manage-->Import-->WordPress to import the 4.7MB XML file, error because it can only accept 2MB max file size, so I zip it and it takes it happily, prompts for which user to assign it to and thus says the process is complete "Have Fun" ...not so simple.
Browse to the blog and its still the same as before, no change whatsoever.
Check phpmyadmin, no db updates
Check permissions in wp-content and for htaccess as per the Codex recommendation, all as per guidelines.
Try and make a fresh XML file, still no go.
So, now I'm hoping there's a really simple thing I've overlooked to solve this issue.