Hi Guys - Have I gone mad

I am trying to get Location Assignment working and appear to be having some problems.

My environment is Server Windows 2008 R2, Workstations XP SP3.

I have performed the following tasks.

Created a Corporate Location
Created a Network Environment and assigned it to the above Location
Created matching criteria in the Network Environment which at the moment is the IP Address of my test Workstation.
Create a Location Assignment Policy and Assigned to my test Devices

When I look at the client agent, as I have permitted the Locations to be manually changeable, I can see both the Unknown Location and the Corporate Location. However no matter what Network Environment Settings I use I cannot get the Workstation to match my Corporate Location and the Agent always assigns Unknown for the Security Location and Unknown for the Configuration Location.

Am I missing a step or have I gone mad. Please help Im going round in circles.