Nokia pairing problem

[Tefler]

I have a Nokia 2760, which I had paired with my PC (running XP). All was fine until today when the Nokia PC Suite asked to be updated. I did this and now the two devices won't speak to each other.
The PC can see the phone and the phone sees the PC. However, when I ask them to pair, I get 'Cannot authenticate phone' on the computer and 'pairing failed' on the phone. There is probably something very straightforward that I'm getting wrong, so would appreciate help here.