Thanks Oleg - I appreciate how hard it is to do all this support - I used to run a forum and participate in several , and I own a software company and a consulting business as well - so I really do thank you for taking the time to help me get this issue put to bed.
The final fix assuming you put all the php generator files in /yoursite/generator/ directory
and desire the sitemap.html file to be in your root directory is as follows:
IN FILE /yoursite/generator/index.php
INSERT AS FIRST LINE
<?php chmod('../sitemap.html', 0644); ?>
CREATE FILE /yoursite/sitemap.html
Run and all should be well - html sitemap in domain root readable by browser - 100% !!
Hopefully this post will resolve it for most, though I do think it would be nice to address this via the menu rather than a file fix. Maybe next release....