I thought I had found a clue - I was runnnig a Beta 1.5.1 version but, I just reinstalled the correct production version (1.5) and still no joy.
I have also tried this outside of Live, running standalone. I drag either a complete pattern from the main GUI (circular pattern selector) or, I drag a single track (say, the Kick track) from the Pattern windown. Both of these just deliver a MID file to the desktop.
So, its definitely not a Live issue. The fact that others can do this, it must be something stupid that I am doing wrong..??
btw, I can successfully Export using the menu method but not drag and drop. I prefer the drag and drop version as it allows us to drag individual tracks.