The upstairs lighting cable needs replacing, (currently stranded
aluminium with no earth). I've seen this question asked before,
but have not found the answer as to; whether or not lighting
cable fixed to rafters on one side and then covered with loft
insulation needs derating. If so then I guess the derating factor
is 0.5.

Lighting cable is so overrated anyway, that 50% derating just isn't an
issue. Run in 1.5mm if you're really worried.

Secondly, I will wish to board part of the loft after the insulation
is applied, and the insulation guy suggests putting the boards on the
insulation and screwing *through* the insulation to the joists.

I don't see how that would work. Surely it would squash the insulation? I'm
assuming it is fibre, not Jablite or something, when you would might get
away with it, although it might start crushing above the joist lines. This
could be solved by insulating upto joist level, boarding, insulating the
rest and boarding again. Not cheap though, and I bet you're using fibre, not
Jablite.

Also I read a lot of talk about vapour barriers under the
insulation, but am still unclear as to whether this is really
necessary or not!

Definately install one, especially for fibre insulation. Just a sheet of
plastic over the joists and plasterboard would be fine.

Christian.