[Pebbled]

Thanks iojam, I've finally gotten it working from the homepage rather than the forum after a bit of help from my hosting company who took a look at what I had done and moved the .htaccess file as per your instructions to the forum like you said

Then I added ANOTHER .htaccess file in the root folder using the following code (as you suggested)

RewriteEngine on
RewriteRule ^((urllist|sitemap_).*\.(xml|txt)(\.gz)?)$ forums/vbseo_sitemap/vbseo_getsitemap.php?sitemap=$1 [L]

(NOTE: change the forums/ to whatever you are using and NOT the whole domain name)

Once I did this I went into the ADMIN CP > vBSEO Google/Yahoo Sitemap Generator and added the Sitemap Files URL to http://www.example.com then regenerated the sitemap

Have also gone to the Google Webmaster tools site and added the URL successfully using http://www.example.com/sitemap_index.xml.gz

I was originally failing because I was missing the point that I needed an .htaccess file in both the forum AND the root folder for this to work.