Thanks for your speedy reply edogg. I started from scratch and this time got to step 7 only to get the error...
Mounting device, please wait....ERROR! (ret = -1).
I have seen others mention this error so I will have a look.
For everybody else stuck on step 7 please read the instructions carefully because it was my fault. When you uninstall the 4.wads although it looks as though the default is uninstall, when it takes you to the next screen you must physically change the setting to uninstall, this is where I was going wrong.
This is my step 7:
Restart wii and select HBC, in HBC click start, on the screen I now see DOP-IOS and WAD MANAGER.
I select WAD-MANAGER, click load, press A, leave the IOS version to use on : <IOS249> and press A again.
When it says select NAND emulator device I select disable and Press A, select source: <Wii SD slot> and
Press A again.
I can now scroll down to NEOR7.wad (2.21 MB) and Press A to install. It does the install and I went on to
Step 8 which was a breeze. In my channels I can now see HBC and NG (Neo Gamma R7).
Please confirm that I have just soft modded my first ever wii correctly.