Ah life saver!
There was a Proxy ARP entry as follows:
DMZOPT1 - 192.168.111.0/24
I deleted this entry and it works now.
I looked up the fountain of all knowledge (google) and now have a vague understanding of Proxy ARP.
From what I understand, m0n0wall was replying back for all IP addresses on that subnet and Windows was interpreting this as that there were machines on those IP addresses already and therefore producing the duplicate IP address message.
As I didn't put that entry in, I'm assuming it was put in when I created the OPT network. Because of this, should I still have any entries in there at all?
Cheers!
Steve
ps. Chris, I'm using your VM m0n0wall on ESX 3 and it's working a treat.