It's amazing how we adapt to the internet. In the past most went to the book shelf to look up something they didn't know. With the internet we google, it's so convenient. An now we even google first before thinking at all :-)
In this case I probably thought (and assumed) a bit too much!
I don't recall precisely, but my mind when I saw the ".HEX file format not supported" message would have likely been thinking along the lines of the most complex solution. Like that the .HEX file really was in some HEX format incompatible with AVR Studio, and that there was no point me actually checking the .HEX file itself because I simply wouldn't know what I'd bee looking for in terms of some format incompatibility, and that would have required research to learn all that stuff again etc.
I was in a hurry so I simply redownloaded it to make sure it wasn't a corrupted and tried again, same result. I tried some other makerbot .HEX files, same result.
So then I would have quickly googled to see if anyone had the problem, and if there was another place I could download the .HEX from.
And of course that lead me to avrdude, and I forgot about AVR studio for a while and tried that, and ran into all those troubles there as well.
It's not the first time I've had issues with AVR Studio, so a genuine .HEX file incompatibility didn't seem unreasonable to me at the time.
So although it seems I was completely stupid on the surface, there were many factors based on my experience and the circumstances that lead me down the path I took.
And yes, with hindsight it's bloody obvious I should have at least took a peak in the .HEX file and I would have noticed straight away it was a HTML file, but really that didn't cross my mind at all it would be such a gross problem like that.
Shit happens.