REsolved
I have been using a third-party program to generate FLV files. Although captivate 7 accept these files & publishes these files in certain formats (including mp4), the Adobe media encoder is unable to convert these files into mp4 format if you want to publish them as html5. In order to resolve this, I had to bring files into captivate as either AVI or MP4 files. The Adobe media encoder then converts them to an acceptable FLV for captivate. If I then publish to HTML 5, the media encoder successfully does the conversion.
As a quick test I tried to directly convert the third-party generated FLV files using adobe media converter into F4v files and then import them into captivate, however the Adobe media encoder would not recognise the flv format.
Therefore, if you come up with a similar problem, I strongly recommend that you bring in your video files as avi or mp4 and let the Adobe media encoder do its work.
Cheers
Mark