Well I finally got the sprites to work OK. At least the little play I've had today. Problem has been how to get the rules for black-white dots for the four different cases and just what is a collision. The key is to concentrate on the white dots in the sprite, that is the 1's. A 1 onto a 1 gives a zero, a black dot and a 1 onto a 0 gives a white dot. The others stay the same. I don't have an EXOR function in the Processing language so had to bit-twiddle.

Here's some code that took a while:

void drawSpriteByte2(int x, int y, byte sprite) { // put byte at scrn x,y
int v15 =0, pixIndex=0, change=0;
color colorOfPixel,newPix=black;
loadPixels();

for (int i = 0;i<8;i++) {
change=0; //don't flick pixels unless we have to
pixIndex = y*width+x+i; //Might have to change to long later
colorOfPixel=pixels[pixIndex]; //current pixel, might change
if((colorOfPixel == black) && (bit(7-i,sprite) == 1)) {
newPix = white; change = 1;
// println("Drawn a white dot on black x,y pixPos "+ x + " " +y +" " +y*width+x+i+ " "+ pixIndex);
}
if((colorOfPixel == white) && (bit(7-i,sprite) == 1)) {
newPix = black;
change = 1; v15 =1;
// println("Drawn a black dot on black x,y pixPos ");
// v15 = 1;
}
if(change==1){
pixels[pixIndex] = newPix;
// println("Putting in colour-->at "+hex(newPix)+" "+ pixIndex);
}
}
//pixels[pixIndex] = white;
//pixels[1930] = white;
updatePixels();
}

void test_drawSpriteByte2() {
drawSpriteByte2(28,25,byte(0x22));
}