Yes the issue seems to be the switchable graphics.
The VAIO has two hardware switched modes - Stamina and Speed. I now have WiDi working on Stamina because in this mode the AMD graphics is switched off. However it will not work when switched to Speed as it then boots with the AMD version of the Intel HD3000 graphics and WiDi fails.
Sony were not very helpful. Their response is that the laptop was sold with Windows 7 and they do not guarantee anything works beyond that version! I have asked them if it is possible to turn off AMD in Speed mode and am awaiting a reply but I suspect the AMD graphics is the only difference between the modes.
The VAIO BIOS is very basic and has no advanced features for controlling switchable graphics.
As I have managed to get it working in Stamina mode I think we can close this thread and just hope a future version of drivers acknowledges the WiDi requirement and offers some better user control.
Thank you for your help.