Thanks for the reply Bill
I've found that by copying the folder:
C:\Documents and Settings\Nick Holmes\Local Settings\Application Data\National Instruments\DIAdem\10.0
which contains the desktop file , config.ini and various other files to a location accessable to all (e.g the documents and settings all users folder) and then locating the following registry entry
[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\CLSID\{285E4FB2-F633-11D1-85DC-008048D9A408}\StartParameter]]
and setting the 'DesktopPath' entry to the new location - it now works.
The question is can I modify this registry entry using the installer, I see there is a registry section in the create installer part of the v8 application builder.