Oh for heaven's sake! I think I've figured it out.

After days of struggling with this I've finally found this thread:

http://www.larian.com/forums/ubbthreads.php?ubb=showflat&Number=505972#Post505972

Looks like I need to copy Character.txt to:

C:\GOG Games\Divinity - Original Sin\Data\Public\My Mod\Stats\Generated\Data\Character.txt

I'm off to try it now. Hope it works *fingers crossed*.