[*ian*]

Yeah, sorry - I should have said.
I removed the Mail rule, reset the preferences in OF then turned everything back on.
I moved the Mail rule to the top of the list as they're evaluated in order but still no joy.

There's no problem with the Mail rule working as such - the incoming message gets marked as read correctly but the only way I can get the Applescript part of the rule to work is by manually selecting Apply Rules from Mail's Message menu.