Ok, I made the changes to sysinit.conf and tclient.conf. Am I meant to end up with extra files called sysinit.conf~ and tclient.conf~ that have the old info in them?
That's just backup files made by the editor. They are fine.

I still have the following in /var/hack/etc/emuProxyZA.conf
proxyIP=210.15.254.253
proxyPort=8080
That should be OK, you have disabled emuProxyZA, so these lines currently have no effect, but it's OK to leave them

I called Netspace and they wouldn't do anything (yet), they said the proxy was 'proxy.netspace.au' and the DNS was 210.15.254.253 on port 8080 if that helps at all?
We already tried this by editing emuProxyZa.conf . It didn't seem to work properly

Can you post the sysinit.conf and tclient.conf please?