Many thanks to the monks that responded to my plea for help. It transpires that the issue was due to an Internet Explorer feature that I was unaware of. The rest of this node serves as documentation for monks who have a similar issue.

The server hostname contained an underscore. This is not allowed according to the DNS spec (RFC 2181). IE manages to handle everything else correctly but refuses to process cookies correctly. This gives the appearance that the users browser has been set to 'not accept cookies' when it hasn't.

I have only investigated this issue using IE6 but other versions of IE may exhibit the same behaviour.

It's nice to have an answer and know that you are not going mad! A quick DNS update changed the underscore in the hostname to be a hyphen and all was well. Cookies are being passed without issue.

inman