I think I may have found the answer myself on another forum. Seems you can get a kind of "capillary creep" happening on some dipsticks over time. The oil is attracted to the smooth finish on the stick and rises up it. There can be various pressures involved in engines too after you turn them off that can cause the oil to push up slightly into the dipstick tube.
I guess this is why they always say to dip, then wipe, then dip again!
So that answers one of my questions, but not the reason for the varying readings on third and fourth dip etc.
