Well it seems that I am not alone, and that it is a known "error" that maybe you can all help with.
First though let me say a big thanks to Mike Lee of Delicious Monster Software and Gus Mueller over at Flying Meat Inc for their prompt and thorough responses to my emails. It is a cliche but having developers that support like they do is just one of the reasons we all love our Mac’s.
It appears that the issue is that the iPod has a built in 1000 note limit as documented which really doesn’t make sense if you think of the iPod as a potential PDA or at the very least a Data Device. I would find it very useful to be able to have all my Books, Music, Films etc on my iPod whilst out to check if I already had an item when I came across a "bargain", and VodooPad on the iPod is a a great help.
Mike suggested that I provide some feedback to Apple on this which I have done. I figured that this is something that Apple really do need to improve. If you agree and haven’t done so already maybe you could leave some feedback as well?