OK, I have now changed the USB cable to be proper USB2 approved. The cable is a standard length (about 1.5m).
I have also tried changing the driver properties for a variety of speeds (38400 down to 4800). I have also changed the buffer sizes. No difference.
I have tried the “Flash Buffer Operations” from the flash utility menu, and that seems to work OK. It seems to succesfully read the flash contents. I have also tried “Comapre Flash”, and that (exepctedly) gives a “File Compare failed” error.