[texhax] can't find latex.fmt

[Karl Berry]

    I have spent hours and hours on this.

Sorry to hear it.

    Am I best to start over again ?  

If you installed it and accepted the defaults, then installing it again
and accepting the defaults again probably won't change anything :).

    set reports:

    TEXDIR=/usr/local/texlive/2007
    TEXINPUTS=
    TEXMFHOME=/u/usr/joe/texmf
    TEXMFLOCAL=/usr/local/texlive/texmf-local
    TEXMFSYSVAR=/usr/local/texlive/2007/texmf-var

That empty TEXINPUTS looks wrong.  I advise unsetting all these
TeX-related envvars and rerunning this command:

    fmtutil --byfmt latex 

If it still fails, then please send the output you get from running it,
with all error and other messages.

Best,
karl