Well I can tell you what's happening in practise (with that very circuit) ....a PWM duty value of 255 turn the leds on bright, a duty value of 0 turns them completely off. But my brain is now frazzled, because I always thought that with 'n' channel fet, with no source/ gate voltage differential (therefore a duty value of 0) a fet will conduct at its lowest RDS resistance .....& to 'cut it off', you need to make the gate more negative.

But obviously with the above config the the source is at ground, the only way is up so to speak (on the gate...ie if driven by a PIC) ..therefore no possiblity of turning the n fet off.....which bit am I not grasping?!

I removed the PIC (so the gate was floating) & the leds remained on (which is kind of what I expect)

Brainache.