Thank-you for the replies. It was useful to know others have the same, or very similar configuration working ok.
Dlink technical support have quickly got back to me with some suggestions.
I can now confirm that the issue is not with the DNS-323 or the Seagate ST31500341AS 1.5TB Drives.
On a 100Mb/sec lan I able now able to get transfers from the DNS-323 to a Windows Vista machine that max out the lan (100% in the Vista network traffic monitor), at around 11MB/sec. This was transferring a 700MB CD iso image whilst at the same time reading and playing an mp3 file from the DNS-323, which did not stutter. This was with both devices connected to my Dlink DES1005D switch.
However, if I connect one or both devices to a lan port(s) on my Dlink DI-604 router, the transfer speed drops to around 32KB/sec or about 2.5% network utilization, and I get stuttering mp3 playback.
I would suggest a similar approach of moving the connections around, trying different cables etc, to anyone reading this thread who has similar issues. Another experiment, which I did not need to try, would be to connect the DNS-323 directly to another computer using a cross-over cable (having already established a suitable IP address on each device).