Thanks for your suggestions Hans and David.
There seems to be an issue with the tif file directly. Although it displays fine in Arc. It's not just MAPublisher that shows it as a black image.
I get the same result when I have tried to import/open it in to any of my other programs, including Photoshop.
I've tried a couple of other conversion techniques to the tiff (using ER mapper etc) and saving it as a jpeg2 image.
Still no luck. But I'll hopefully get back to that job sometime early next week and give it another go.
I appreciated your replies.
Most of the GIS software export Geotiff with non-square pixel in default settings. This primarily means that the pixel size in x and y direction is different. The Geotiff header contains this information and that is utilized by other GIS software to display the tiff. So you need to export Geotiffs with square pixel for display in Photoshop or other image display software. The second reason could be LZW compression, it will be good to export the Geotiff without any compression.
Now as far as Mapublisher is concerned it does not read Geotiff header, but uses a small file with an extension .tfw (World File) to geographically position it. So you need to enable creation of .tfw file in the software you are using to export Geotiff. Another suggestion, do not export it as Geotiff because Mapubisher does not read the Geotiff header at all.
If you want then I can help you out, just send the geotiff file to me and I will send you Mapublisher compatible file. I use Mapublisher 9.3, so I will first check so that you do not face any problems in importing.