Grounding and Pot Volume issue.

1. I get an annoying buzzing sound when playing open strings and harmonics, which is almost disappears when I place my fingers back on the strings. I presume this is a grounding problem? I have a pre amp circuit in the guitar, would this be the cause of the noise? or can I still have the boost circuit and still have a noise free guitar?

You are not a good ground so you touching the strings doesn't ground anything on the guitar. You are a source of noise and touching the strings grounds you out because the strings have a ground connection. What you probably need is shielding on your guitar's control cavity and maybe pickup cavities.
http://www.guitarnuts.com/wiring/shielding/shield3.php
http://www.stewmac.com/FreeInfo/Electronics/Shielding/i-3789.html
2. I do use my toggle switch like a kill switch, two pickups ,one volume off, one full on like Tom Morello. Yet even when I have one volume rolled right back its not totally silent (some of the sound still gets through to the amp) Can this be simply a problem that would be solved by changing the pots? or could the problem be more complex

Sure, that will happen if you have the gain high enough. If you switch to a pickup it's in the circuit and the volume just puts a big resistance in the circuit and that cuts the volume but it doesn't remove the pickup from the circuit - that's the job of the pickup selector toggle. If you want a kill switch maybe you should get one added to the guitar?

Thanks load for the advice.

My local guitar tech has had a look at the electronics and he reckons its the pre amp circuit causing the noise. He says they are a common source of noise problems. He reckons if I remove the circuit the nosie will go.

I am considering ditching the circuit to go back to noise free playing. However I am wondering if its possible to get the best of both worlds by going down the sheilding route? but dont want to do the shielding stuff if it makes no difference and I still end up removing the circuit.

On a completely different note, my Humbucker makes a loud crackle when I touch any of the pole peices, is this normal?
Could this be contributing to the nosie problem.

Thanks again

My local guitar tech has had a look at the electronics and he reckons its the pre amp circuit causing the noise. He says they are a common source of noise problems. He reckons if I remove the circuit the nosie will go.

I am considering ditching the circuit to go back to noise free playing. However I am wondering if its possible to get the best of both worlds by going down the sheilding route? but dont want to do the shielding stuff if it makes no difference and I still end up removing the circuit.

I have no experience at all with on-board pre-amps. He could very well be correct. Shielding will reduce any induced noise into the system but if something on-board is creating noise then the shielding won't stop that.
On a completely different note, my Humbucker makes a loud crackle when I touch any of the pole peices, is this normal?
Could this be contributing to the nosie problem.

Oh yeah, this isn't normal. The humbucker should be connected to ground. Maybe this is one of your sources of noise. If you have this noise and then you feed it through a pre-amp that will boost everything including any noise due to bad grounds. That noise may normally be too low for you to hear it but after the pre-amp boosts it then you can hear it. It sounds like you might need to check out all the wiring and make sure that the grounds are correct.