Well I've tried all the ideas posted here and still no joy.

I mentioned before that the midi keyboard worked fine on an older system with BIAB 2013. Well I took that old laptop and installed BIAB 2014 on it and then hooked up the midi keyboard. Without missing a beat it worked!! Tap a key and I get sound and the onscreen keys move too. Looking at the Option/settings it's, of course, all default stuff.

Back to my new laptop (the problem one) and even replicating the settings from the old one to the new I still have no success.

The old system is running Windows 7 32 bit.
The new system is running Windows 7 64 bit.
My laptop is brand new, purchased just before Xmas.

I'll contact PG Music support and if I have any success will re-post back here.
It makes no sense to me that this fails to work. Drivers are installed, device shows up in Midi Inputs, but nothing when I try to use it! What is more frustrating is that outside of BIAB (ie using standalone plugins, Sonar etc)I have absolutely no issues. Maybe uninstall BIAB and re-install?

Happy New Year guys!