Linda,
Thanks for the quick reply.
I'm a bit embarrased now....I forgot to check the module template override file
I bought a template supposedly for 1.3.9g.
However, the 1.3.8 bug fix was not implemented in the new_products.php file.
Made the change in the code, and now it works beautifully.
Will have to have a word with the company I bought the template from, to see if any other files are not 1.3.9.

Cheers
Endre