Well I'm still trying to work through the problem but initial findings:
1. Don't always believe what the software writers say about their backup system.
2. A Hosting company's IT support dept. can actually be less than useless.
Martin, it sounds like Mayhem got off lightly, (apart from the members list).
Another forum I'm a member of got hit a couple of years ago, when they went to restore the backup, the first 'usable' thread-database backup was 10 months old, (ironically the members database was okay), they lost a lot of data and members because of it
As the IT-Admin said afterwards - every week that so**ing backup gets a restore check