I bring my rappy up to a hover, as I back off the collective to prevent the heli going skywards I can hear the head speed greatly increase. Obviously as I let off the collective the wind resistance on the blades is reduced but the moror keeps the power on until the collective is almost completly down.

My curves are set up pretty much as standard for begginers (raptortechnique)

I have been trying to get the fuel mixture setup because im thinking this is where the lies because listening to the sound of the engine, it sort of splutters up to lift off speed, lifts off the ground and starts to rise up. As I ease off the collective the engine sound changes to a higher pitched, crisper noise and the headspeed go's wild. This is at the middle stick postion.

Am I suffering the dreaded TT39 syndrome? I have an MDS48 in a box thats seems perfect. (havnt tested but plenty of compression ect) could I run this without upgrading the rest of it to a 50 if I choose to go down that road...

its not your engine, its your setup.

Your throttle is too high when you are comming off the collective. You need to get the mixture set right first, then set the throttle curve so the blades don't over speed. Takes time, but just keep bringing the throttle back a bit at a time to keep it from over speeding. Get the mix set first.