Ok forcing php5 seems to have fixed this!
in .htaccess make sure the following is included:
AddHandler php5-script .php
However I have noticed that the plug-in does not store the file permanently in the wpcf7_uploads folder, they are deleted once the email is sent.
Possible feature request then for next version??
And with this also the ability to view form submissions in wp-admin??
If someone has done a fork for this pls let me know!
Thanx