Thanks to sterling work done by Sam, this problem has been solved.
What happened is that I created a new folder in my web document tree (/var/www/html/silverstripe20) and copied the php installer tarball into it.
I then unpacked the tarball and it created a folder at the same level called silverstripe-v2.0. As I did not want to use a long hierarchy of directories to call SilverStripe I copied all the files out of the new folder to the parent folder and then tried to install there.
The message shown in the previous post was caused because the installer did not ignore the silverstripe-v2.0 folder but went down into it. By the sound of the error message, it tried to use sapphire etc files in that subfolder also.
The fix was to delete the subfolder. I also deleted the tarball there as well (I have a separate copy saved on my machine should I need it later)
All fixed :)
(Is this something that should be incorporated in the next installer-a check for a silverstripe subfolder? Would there be a valid reason for having a folder with such a name in the lifecycle of the CMS? )
Once again, thanks to Sam for his assistance