Well I have good news, good news and good news.
Note I used Transcend Ultra Speed 133x 8GB CF and Transcend PCMCIA CF Adapter.
- The 8GB card and PCMCIA reader worked perfectly first time (didn't even require formatting)
- The door closes completely
- Copying the files was very straightforward, even if you use iTunes to manage podcasts (in iTunes select "Show in Windows Explorer" and just copy the Podcast folder straight over)
- The COMAND screen shows the folder contents in a very clear way
- IT PAUSES WHEN YOU MUTE

Appears that my problem is solved - hopefully.