Fixed this after a while.
Nothing wrong with the RTL dongle, I checked it against WWV 10MHz, only 18ppm out.
I did notice though, that when I tuned up in frequency on the radio, the SDR tuned down and vice-versa.
In the Definitions and Select Radio options, there is an 'invert spectrum' check box. I ticked both and now the radio/SDRC tuning is spot on.
Hope this may help others trying to use the 1st IF tuning option.
de Richard G0MIE