Still can't resolve this issue so I tried another approach:
My HTC and my PC have Bluetooth available so I thought I would set up a trust for ActiveSync to use this mechanism rather then USB - However when I tried to set up a COM port for ActiveSync to use I got the message 'Device HTC_S740' does not support service 'Bluetooth Serial Port'
So next attempt is to use WiFi to perform the ActiveSync function. Two settings of note to make this work:
1) Remove the setting on WM 6.1 under ActiveSync that specifies 'Synchronise all PCs using this connection'. On my device the only connection allowed is USB - Does anybody know why I can't select 'Internet' here?
2) Disallow ActiveSync on the PC from connecting via USB (check box in the Connections... dialog), as I still connect my phone to USB to charge during the day.
I can't browse the device :( but that is no loss (I can always turn the USB connection on again if this is necessary).
So far no freezes in Windows and a synchronized device. Bluetooth would be nice though