ok... done a lot of digging on this.
It is an issue with the img_desc file.
If I revert to Image & Title, those errors dissapear.
The error is that there is a <p> element with the span class. The <P> element comes from the description of the category.
So if I remove the span class, the errors go.
So
<span class="hikashop_category_desc" style="text-align:<?php echo $this->align; ?>;">
<?php
echo preg_replace('#<hr *id="system-readmore" */>.*#is','',$this->row->category_description);
?>
</span>
Becomes:
<?php
echo preg_replace('#<hr *id="system-readmore" */>.*#is','',$this->row->category_description);
?>
does that create any problems that you can think of?