Thought I'd post this after scouring the message boards and finding multiple solutions to various problems and spending several days trying em out in different combinations. I finally got all the problems resolved changing the settings etc as follows:

1) download squeezebox version 8

2) install the spotty plugin

3) do the account validation to spotify as per the instructions in the spotify settings - ie, play a song on spotify and choose the squeezebox as the device you want to play it on. This will do the account validation.

4) go to spotify and create a developer account. This costs nothing and is really easy. On completion Spotify will provide you with a Client ID. Copy this , switch back to spotty settings and paste it in the Spotify client ID field.

5) leave the token import field as 'yes'

6) leave all other fields at default values

7)wait for 5 mins!

7) reboot the pc - my need to do this several times

has worked seamlessly since then

hope the above helps - was on the verge of selling my duets!