I have uninstalled axepad and have started trying to use programming editor via xp within virtual box. That does not seen to be working either because of a COM port issue between virtualbox and the host machine.
When I went back to windows programming editor can't find the hardware to download to, that is in addition to the USB port that AXE027 was connected to has now stopped working.
If you are running virtual box on the same PC you were using before, then the problem with FTDI_SIO will likely be preventing the AXE027 working with that.
As I understand it, Linux still manages the USB system and then provides access to devices to virtual box. If Linux cannot recognise the AXE027 then it cannot provide access to it for either AXEpad or anything running in virtual box.
The issue is not so much that AXEpad or programming editor under virtual box are being problematic but that you have a Linux system which won't recognise FTDI serial cables or modules.
You likely need to forget about getting any PICAXE software working at present, focus on getting Linux to recognise the AXE027, able to create a /dev/ttyUSB* interface when it is plugged in, then move on from there. To achieve that you need to resolve the FTDI_SIO issue. That may require a reinstallation of Linux.