The file mode command creates the file if it doesn't already exist automatically. That also irritated me because I spent ages looking for a 'make file' type command... Damn microsoft to hell!
I tried all the open modes. The modes that generate the error are:
Output - according to the help files this is used for writing to a file

Input
Append
The modes that worked are:
Random - which generated unreadable text
Binary - I tried this just now, and the name made me think it would generate lots of 1's and 0's but in fact when opened in notepad I can read the text
What are the other modes used for and why do they generate an error when used in the code on the original post?
[edit] Also, when using the open mode binary - how do I create a new line with the fileput command?
[edit2] Worked out the above question: FilePut(1, Chr(10))