Thanks for taking the time to reply. You are right about the path, although that wasn't the issue, I did use the right one most of the time, just pasted here with a path example.
Eventually did get this working, even though I still don't know why many of the examples wouldn't work. I'm also aliasing the full domain locally, as I normally avoid relative links. Whilst my solution was minimal and did leave bits out (e.g. logs) will post this for anyone really stuck:
In C:\WINDOWS\system32\drivers\etc\hosts on a fresh line below 127.0.0.1 localhost added:
In C:\xampp\xampplite\apache\conf\extra opened httpd-vhosts.conf and below commented section added:
DocumentRoot "C:\Documents and Settings\User\Desktop\foldername"
<Directory "C:\Documents and Settings\User\Desktop\foldername">
Allow from all
This also is fine using local subdomains e.g. folder.local instead of the domain and naturally functions without the www if that's your preference, I just have my links that way so no choice. No idea if this is a good solution but works and with a few on the web that don't, might help someone. In case anyone using this forgets, good to remove the reference from the windows host file when you put the site live, or you will still be seeing the test site.
Very grateful to all who helped with XAMPP, really useful. Still a bit to work out, testing email forms, issues with php includes in subfolders, which I solved but possibly not the best way. Will read up more on that and using XAMPP, which has helped iron out a few glitches on a site about to go up, a lot easier to do this on your own PC.