Thank you - and have sent 2 BTC (txid: 966e4ecc3c40828e63cd012c98f947494fd6aa907e0a993bf9926538aed6cd94) - good to know that the system is working (and yes you could always use USB rather than webcams - just depends upon your level of paranoia).
Proof that jl2012's answer was correct is that the private key for the 1ELPYyJKLfeQHPu3FCSSKfFHjhCkEbapct that was generated "offline" is 5Jo14o6CAYQin8WgqR59s1CQ4Hh4VirsnBSEizfE7sFb5r75i8g (so don't ever send BTC to that address again).
Damn, I found the problem. The signtx script was corrupted.
Now how should I go around to fix this ?
No text editor, no internet connection for apt-get commands....
Okay - if you want to keep the private and two public keys you originally created then check the instructions about "restoring" at the end of "usage.html" otherwise you can just start from scratch ... or ... you could always "scan" the signtx script and send it across via QR.