Thank drauk. I think I've got it figured out now.
As you say, the DNS Client service is a cache. Windows looks in HOSTS first, then the cache (DNS Client Service) and then on upstream until it gets an answer. Upstream is the Freesco DNS cache, then the ISPs slave DNS servers, then the ISP's Master DNS server and finally (possibly with a few in between) the 13 root authoritative DNS servers.
So no penalty for disabling local DNS resolution on the Winbox because the Freesco box is just upstream.
No idea why the service takes so long to start up. I thought it was because I have a huge HOSTS file (redirecting rubbish to 127.0.0.1) but I have the same HOSTS file on the kid's machine which boots quickly.
Cheers!
Edited to add: I have just found this on
http://www.dslreports.com/faq/9166 so it seems I am not alone.