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		Dunno about the rest, but on my camera there's a little + - knob to the right of the eyepiece. You pull it out and turn to correct the eyepiece for your short or longsightedness. If it's out everything is out of focus. 
IIRC to set it you set your focus to manual and infinity, point the camera at something reasonably distant, then look through the lens and adjust until everything is in focus.
If you want to test the lens, the usual is to set up the camera on a tripod and something you can focus on (page of A4 text or similar). With a tape measure shift either the camera or the focus card. Set the distance to the focus distances on the lens, roll the lens to that focus mark and check if it's in focus. Repeat at several different focus points.
If it's in focus at the measured distance then the problem isn't with the optics.
	 
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		So the lens will auto focus for some of it's range but not at infinity.  Is that correct?
Some older AF lenses can have problems with newer cameras.  I know the Sigma 150mm Macro had issues on some DSLR's and early models of this lens had to have the chip replaced.
On the D300s you can calibrate the lens to the body and may be able to get around this.  Read the manual on this one and look at the Nikon support site and also search google for more info.
The other thing that may be causing the AF issue is the aperture.  This shouldn't happen as most, if not all, DSLR's are fine focusing at f5.6 but some have problems above this.  This could also possibly explain the ability to focus at shorter zoom but not at full zoom.
	 
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		Now just to make it stranger, if I slowly zoom out and focus at each increment it will focus out to full 300 but if I then try to focus on someeting else it goes into hizzy fit?
	 
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		Out of curiosity I ebay'd the lense to see what it is worth.  They are now only worth about $200 to 250 new.  It was a brand new product when I bought it in Darwin and cost well over $500, so it just isn't worth stuffing around with.
 
Penny saving time and maybe an 18 200mm nikkor zoom or 28 300mm nikkor zoom
	 
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		28-300 would appear to be a better lens on paper and it is suitable for FX if you change over in the future.  I have an 18-200 and it is OK, but nothing flash on the D200 and tends to be very soft.