The other day I finally got around to putting my summer wheels back on. While a back wheel was off with the corner on a trolley jack, I had a quick inspection as I've always had what I feel is a clunky back end (fnarr fnarr). I noticed that the rear half shaft had some play along its length, so to speak, ie. I could push and pull it into/out of the rear differential by maybe 5-10mm. When it hit the limit it made the kind of knock that might explain the knocking I sometimes get over bumps.
Now I guess the shafts are on splines and are not held in by anything other than being trapped between the diff and the hub, and the suspension would be at full extension, but does this sound normal??

Yes thats normal, as you go over bumps etc the wheel will rise and fall thus increasing and decreasing the the lenght between the rear diff and the wheel hub. There has to be some play to stop it from snapping. There are circlips which hold the half shafts in place. If you were to let go the wheel hub stays and release the locking nut and using a small crowbar you can ease the halfshafts out of the diff. to take up any change in angle there is a universal joint ant each end.
When removing the drive spline from the diff you may loose some gear oil, but im sure you dont want to take them off. There has been a lot of problems with the rear diff.