Sorry about that, in my excitement I managed not to mention the solution. The information on how to use mkinitrd to set up ACPI can be found in this post:
(Many thanks to Fluxx)
And as for getting sleep states to work, it's very easy. Once you've followed the steps that Fluxx has outlined, in KDE (providing that is the GUI of your choice) you can goto KMenu > Control Center > Power Controls > Laptop Battery > ACPI Config, and use the ACPI Helper to enable sleep states e.g. standby/suspend/hibernate. After enabling those three you can then go to the "Button Actions" tab and change your "Lid Switch" options.
While I'm not sure this is the best way to go about getting this working correctly, it's just one way that I have managed to get it working on my laptop. I hope this can be of some help to other LQ members. Good luck.
I should also add that I am using the 2.6.18 kernel, and that I prefer this method over adding ACPI to my kernel for performance reasons. I like to keep my kernels small