Posted for other users' info:
Thanks for your assistance.
After we were able to create a working iRite instance from scratch, I went about trying to recreate the required iRite form several times trying all sorts of configuration variations until I found the cause of the problem.
It turned out the problem was being caused by the Base HREF setting.
When configuring the iRite instance I was under the impression that the Base HREF setting was used just to give iRite a relative path to the uploaded images store. I'd therefore set the Base HREF path to images/gallery/ (FCKConfig.BaseHref = 'images/gallery/' in the config file).
By removing this setting all the iRite content immediately displayed correctly.
After a bit more tweaking around to get images to upload etc I found that if I set the Base HREF path to the website's root then I also needed to FULLY specify the absolute paths for the FCKConfig.EditorAreaCSS and FCKConfig.StylesXmlPath settings in the config file (ie. using relative paths for these settings resulted in the same problem).
This is now all working in IE7.
Thanks again Jimmy.