Hi All..... and thanks for being patient with me!
Okay, I've had some success. I reinstalled the XML, created a 'Miserable User' group using the 'Create Permissions Based off of Usergroup' function but then manually set all it's permissions to 'No' as it will only ever be assigned as an 'Additional Usergroup'. This is now made my 'Private Forums' private once more. I didn't have to change the forum permissions because they were inherited from the 'Registered Users' group. Hope this makes sense....
As for my install if Photopost Classifieds and Photopost Gallery, that all I needed to do to sort the problem was to use the 'Refresh Usergroups from your Forum Software' tool within 'Edit Usergroups' and ensure that the hidden category within the Classifieds had it's checkbox unticked for 'Miserable Users'...... job done!
I'm still not assigning my annoying member back to the group quite yet..... a bit more testing to do but so far so good, thanks All.