Can't escape empty textbox

I'm trying to track down the cause of an annoying interface bug in an app that was recently upgraded from VS2003 to VS2008 (the bug did not exist pre-migration). What happens is this :

1) User clicks in textbox containing a date.
2) User clears date
3) User tries to move to another field, but can't. No error messages appear - it's as if the validation failed.

Further info :

1) The textbox's Text property is bound to a dataview which uses a datatable as its source. The bound field is a nullable datetime field with no constraints or default.
2) The Validating event fires and the CancelEventArgs property is not set to Cancel. The Validated, LostFocus and Leave events all fire as well, going LostFocus > Leave > Validating
3) I can't see any code changes relating to the control or the datasource with a couple of exceptions. The first is that this :

Me.txtRangeEnd.DataBindings.Add(New System.Windows.Forms.Binding("Text", Me.dvClientNos, "RangeEnd"))

has now changed to this :

Me.txtRangeEnd.DataBindings.Add(New System.Windows.Forms.Binding("Text", Me.dvClientNos, "RangeEnd", True))

The second is that this :

Me.dcolRangeEnd.DataType = GetType(System.DateTime)

has now changed to this :

Me.dcolRangeEnd.DataType = GetType(Date)

There is also this, which has been in the code since day one :

AddHandler txtRangeEnd.DataBindings("Text").Format, AddressOf FormatBoxToDate

Private Sub FormatBoxToDate(ByVal sender As Object, ByVal e As ConvertEventArgs)
Try
    If Not e.Value Is DBNull.Value Then
            e.Value = Format(e.Value, "d")
        End If
    End Try
End Sub

Now, if I remove the ", True" from the adding of the databinding then I can exit the control with a blank value, but it then reverts to the original value. Removing the date formatting appears to make no d