I think I've sorted out the problem with the DNG 1.3 version not doing the bad pixel correction properly in ACR / Lightroom.
Revision 1805 should work better (fingers crossed).
I've also removed the bad pixel opcode values 1, 2 & 3 - so only pixels with a value of 0 will be fixed.
Having gone back over all my test files I can't find any with non-zero values for bad pixels (when looking at the correct active area only).
The issue with the IXUS220 having values up to 16 seems to be wrong (my bad) - hopefully someone with an IXUS220 can test this and see how it works.
Phil.