The problem was my understanding of the documentation. I did not realize that the 'root' was the full path to the folder - I thought that if the URI was relative to the document root, then it could be left blank (as was suggested in the documentation), but in fact it appears that for a path relative to the $DOC_ROOT, you still need to do the path, but can use '.' (e.g. ./path/to/folder ). It's all working fine now, however I don't feel it was particularly clear in the documentation - something to look at perhaps.
One other slightly confusing thing with the documentation is the fact that different names are used for the same setting. In the online documentation, the term 'root' is used. In the configuration file, and the admin setup, the term 'location' is used. On the same page covering context online, the term 'location' is used for a different setting, relating to Java.
I appreciate that you've been busy getting version 3 up and running, and I commend you on an excellent product, but when you have time, it might be an idea to take a look at your online documentation and check that each section correctly corresponds to the latest version, and that they cover all the main mistakes that people might make.
Thanks again for your support.