Ok, no takers. This issue is probably due to my Radeon (via Catalyst) drivers, but I can't dismiss something like this... so I have to code around it.
I have DBpro 6.6 because 6.8 and 6.9 scared me with their issues. Hopefully 7.0 proves to be nice.
Anyway.... well this is what I've found out.
SetButtonImage does not like DBPro type images. In the Simple Gadget demos for Buttons I am seeing the attached picture. It's almost as if the wrong color depth is being used or something. Very strange.
Good news is I have a workaround (which I don't like, but hey). If I use SetButtonImage with a filename argument directly (instead of a DBPro image number) it works fine. That means my nice 256x256 icon grid that had lots of 32x32 images on it, will have to be split up into separate files. Poop.
Does the Buttons example run for everybody else? Hopefully it doesn't look like my screenshot (which at least buttons doesn't crash).
I'm not a real programmer but I play one with DBPro!