Configuring preferences and options in Outlook.com
So, weird thing, in my 'Download' settings there was an extra box below the two in your screenshot. I can't remember what it said (it didn't seem relevant to the problem), but there was a blue "Clear" button. I pressed it, the box disappeared and now downloads work properly.
I guess it must have been some kind of exception.
Thanks again for your help Karl.
It did turn out to be a chrome issue, and by luck i solved it myself without even knowing what i was doing. Isn't technology wonderful.