Got it sorted, kind of !
I set up a dual boot on a spare hard drive and put windows 7 sp1 and nothing else, and it worked fine, updated graphics drivers, still ok, installed FreeTrack2, crashed on startup everytime, even when FreeTrack wasn't running.
So uninstalled FreeTrack and Arma3 started no problems, seems it's a known issue with FreeTrack.
I have had a fiddle with FaceTrackNoIr, which seems to work ok, although no where near as easy as FreeTrack to setup.
I don't want to invest in TrackIr incase the Oculus Rift arrives and is as awesome as almost everyone seems to think it's going to be.
Thanks for the help guy's.