OK, I now have the answer to my own question!!
After much debate with the host, they accepted it was a problem with their servers - I was not doing anything unusual (as suggested by fourm member). It turns out W2k3 uses application pools and my site was in one which was recycling too often. The site has now been moved to a different application pool and is now stable.
The important message is that I was given a load of flannel about concurrent users by a technical operative answered somewhere in another part of the world. It seemed plausible (8 concurrent users), so I accpeted it. However, as I couldn't fnd it anywehere on their site or their Ts and Cs I went back to them. My persitence paid off (and I saved the cost of an expensive account upgrade), but how many others are being fobbed off by incorrect advice?