I am a bit of Linux newbie so i could be doing something stupid.

It could be your web-browser that's doing something stupid, since...

tar -xvf 108196-launcher-v1.1.tar.tar

...it looks like the original .bz2 extension has been changed to a .tar extension.

I'm pretty sure i've not got a corrupted file (downloaded it several times now), and get the same error with the v1 file!

What am i doing wrong?

The file is compressed with bzip2. You'll need to bunzip2 it before it can be untarred. WinZip, or something like that should be able to handle it, since I don't think it's native on the empeg. (If everyone prefers, I can distribute it as a tar.Z image, since the version of tar on the empeg can handle those natively.)

Just a note, though, you may not want to untar it directly on the empeg, since the distribution contains source code and a few other non-essential files (not that I class the README as non-essential).

If you can't find anything to uncompress it, let me know,
and I'll roll an uncompressed version for you...

Cheers,