Have sorted it myself. Seems the Wyse doesn’t like Windows Server 2008 FTP server – even though the ftp server shows a connection the terminal can’t read from directory – despite applying the same permissions etc etc.
Moved it to a server 2003 ftp and it worked as it should straight away.
Could be a UAC thing perhaps?
Anyhow it’s working as should be with the DHCP option set to /