You should not use setup-ds.pl.  You should use setup-ds-admin.pl
instead.  See -
http://www.redhat.com/docs/manuals/dir-server/install/8.0/index.html
 
thanks, I can't believe thats all it was... 
 
When using the console, I noticed strange behaviour and java errors, I guess FDS still needs an old version of JRE?  The wiki links to 1.4.2, I just wonder why a newer version can't be used?