Job done, and thanks for your pointers.
Seems VPC is indeed the only option to upgrade a windows mobile device (missing sync has no support for .exe - only .cab) using a mac. The other option, actually using a windows PC or laptop is something I try to avoid.
In the end I used VPC. After an entire day upgrading XP it finally got to the USB, 'this device cannot be started' point. Switching off advanced networking features on the phone fixed this and active sync sprang in to life.
My advice - If you own a mac and want a 'smartphone' get an iPhone or wait for Android.