Okay, finally got it working. There was a small catch with dot-qmail files in vpopmail
For a normal qmail installation, you need to use a .qmail file in the users home directory (as far as i can tell).
for vpopmail, a user doesnt have a home directory, and it dosent go into the users virtual mail directory either, it sits just below that in the domain's "root" directory. /home/vpopmail may be different for some users.
/home/vpopmail/domains/domain.com/.qmail-bounce for
bounce@domain.com (contents as above)
The contents of the file are still the same.