Mate, took a few days but eventually got it working on the production site.
Everything was setup correctly but I had to remind it how it was setup.
Basically I noticed my search was working on SPS and it would also return results from team sites, however the team sites search had stopped working. Apparently team sites use SQL and SPS uses mssearch service. Anyway, I found a post that said to try this as a fix, which I though might be my alert problem - it was:
1. Open the SQL Server Enterprise Manager. From the Action menu point to Properties, and then click Security.
2. Change the Startup service account to System Account.
3. Stop and then restart the MSSQLServer service.
4. Change the Startup service account back to the domain account you want. (Make sure that you perform this task through the SQL Server Enterprise Manager and not Control Panel.)
So it was already a domain admin account, but I set it back to system which stopped and started the SQL service, Changed it back to my domain admin account again, did a reboot of the server, and it works, yeh I'm sort of half happy, now I have to work out the search problem because it didnt fix that.
Cheers and thanks for your help.c
Also credit where credit is due the post is