Nextoo,
I found a fix, press and hold the square pause button + the DVD > Dubbing button at the same time on the front of the machine until the picture is displayed correctly, this resets the video out back to interlaced.
Once I did the above, problem was fixed, I also went back into the menu and the 480p and 480i modes are now selectable again...
Thanks very much for pointing me in the right direction!
.