So presumably there is a little bit of play in the steering wrack to be able to lift the track rod end out of the steering arm hole? Or have I got to undo the second screw in the steering arm to disengage the entire assembly marked as K1 (brake discs etc) there?
Yep, there's a decent range of movement. If you're working on the passenger side, you'll probably want to put the steering on full left lock to make sure the tierod comes out of the box section as far as the rack permits. You shouldn't need to undo anything else other than the track rod end from the the steering arm and at the other end from the steering rack. You might want to support the weight of the disk, hub assembly and suspension on a jack or block of wood to make life a little easier getting threads and holes lined up.
So when garages are talking about computer aided tracking, geo and all that jazz, are you saying they are actually just tweaking locking nuts like this one? Sorry for the stupid questions, but I also wanted to know what holds the locking nut in place? I mean how is it locked? Presumably I could screw it all the way to the end of the tie rod end thread if I wanted to? Why is a nut halfway up a thread locked?
For toe (or "tracking"), that's about all they do. If the wheel was dead straight ahead 0° toe, they reduce the number of visible threads on the tie rod to increase toe-out and increase the number of visible threads to give toe-in. Altering camber (on the VX) involves adding/removing camber shims (part 13/14 on the second pic) that are locked between the steering arm and the hub upright. Castor is adjusted by moving the position of the upper wishbone by adding/removing washers in front or behind the wishbone mounts. Similar arrangement on the rear as well.
The trickier bit is knowing what you want in the first place, understanding how those adjustments affect each other and just accurately measuring where you start from and where you end up. It's reasonably easy to do yourself as long as you have a nice bit of known flat ground and some very simple equipment.