SOLVEDWas able to install and reboot PCLOS 2010 LXDE :-)
I don't know how exactly, but this did the job for me:
1. Wiped the whole disk clean again using the 2009 LXDE Live CD
2. First created my /boot partition 300MB as ext3 - Primary (hda1)
3. Created a Swap parition 4GB - Primary (hda2)
3. Created a partition labeled pclos-2009-lxde as ext3 - Primary (hda3)
4. Created a partition labeled pclos-2010-lxde as ext3 - Extended which becomes hda5 (hda4 - extended space)
5. Created last Partition for data and misc as ext3 Primary (hda6)
[root@terran ~]# fdisk -l
Disk /dev/hda: 80.0 GB, 80026361856 bytes
255 heads, 63 sectors/track, 9729 cylinders
Units = cylinders of 16065 * 512 = 8225280 bytes
Disk identifier: 0x161e161d
Device Boot Start End Blocks Id System
/dev/hda1 * 1 38 305203+ 83 Linux
/dev/hda2 39 547 4088542+ 82 Linux swap / Solaris
/dev/hda3 548 4371 30716280 83 Linux
/dev/hda4 4372 9728 43030102+ 5 Extended
/dev/hda5 4372 6920 20474811 83 Linux
/dev/hda6 6921 9728 22555228+ 83 Linux6. After installing pclos-2009-lxde on hda3, I immediately replaced the CD with pclos-2010-lxde and rebooted.
7. On 2010 LIVE CD bootup, it gave me that "Error: Unable to establish connection with FAM. Do you have FAM or Gamin running?" error message which is easily fixed by right-clicking on the desktop, left-clicking Desktop Settings > Desktop > Check 'Manage the desktop and show file icons'
8. I double Clicked Install and it ran as expected :-) I then installed and "/"'etd pclos 2010-lxde on sda5

Yehaaa! - Both pclos 2009 and 2010 LXDE are installed.
2010 Looks and Feels brillant, absoloutely no complaints, well except for that of no wvdial.
Any easy wvdial install method perhaps ?
Thanks a mill old-polack you were a great help, just goes to show the importance of proper partitioning.
Thank you to all involved with 2010 PCLinuxOS, good job good job.