I'm on a XAMPP dev server at the moment. Apache 2.2, PHP 5.4.4
Its definately a header issue (im still new to headers so I'm not 100% ok with them) but I found a workaround:
if I edit CreateDocx.inc and call ob_clean() and flush() (passing no arguments) directly after header('Content-Transfer-Encoding: binary); I get the desired output.