Thanks to Ed McNierney, Frank Warmerdam and Bart van den Eijnden - it
seems that ArcMap is requesting a PNG from Mapserver - which then
defaults to 256 colours.  By changing the OUTPUTFORMAT IMAGEMODE
definition for png to RGBA, it has resolved the issue.  In the end an
easier solution to than I thought it would be.
Thanks again guys for the quick response.
Regards,

Brendan Power
Manager GIS
Fire & Emergency Services Authority of WA

address:        480 Hay Street Perth WA 6000
postal:         Po Box P1174 Perth WA 6844

phone:  9323 9351       mobile: 0417 918 809
fax:    9323 9384       web:            www.fesa.wa.gov.au

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