OK, thanks. The lack of CR or LF in the 'line endings' box is what caused the difference from the Arduino IDE. Clearly that's important, so could I suggest two improvements:
a) move it nearer the left, I didn't even see the box until I made it very wide;
b) default it to CR/LF rather than blank?
Now, moving back to the debug (which I still need to use for my 'real' project), it still doesn't seem correct. I put a breakpoint on the line 'if (Serial.avaialble() > 0)' but this isn't hit until
after I send in some data. Surely it should be hit hundreds of times while waiting for me to enter data?
If I put a condition to stop on hit count=2, for example, again it doesn't hit until I press 'send'. Then I pres 'continue', then 'send' again, and my input data is prefaced with a '?' that I didn't send (which is where I started with my 'real' project.)
Dare I say that if the breakpoints had worked as expected, I would have been able to solve the CR/LF issue without help?
(edit) just tried in AtmelStudio and have same problem.