Found a couple of useful references:
A tutorial from the University of Iowa http://www.divms.uiowa.edu/~jones/step/index.html#others
and a book published by the IEE http://ebookee.org/Stepping-Motors-A...g-_598987.html
(Should have known about the last one being an MIEE myself!)
I've got more reading to do but discovered these points:
1. Step position is accurate for both full and half steps and is lower for higher degrees of microstepping.
2. Microstepping always involves driving the windings with an approximation to sin/cos waveforms. The "Morphing" referred to above involves switching from microstepping to full stepping at high speeds to increase the torque.
3. Torque depends on the angle between the present position and the desired new position according to a sine function. Thus for example if you are 1/8 microstepping and wish to move one microstep the torque will be reduced to 20% of holding torque. However if you wish to move say 4 microsteps at once the torque available will be 70% of holding torque and if you wish to move 8 microsteps the full holding torque will be available. So in a way both Jonathan and myself are right.

Now to study in a bit more depth!

Good luck with the degree course Jonathan.

Russell.