Hey sorry for not posting this before. I am currently very busy finishing the project off so have not had the time to update this. I will come back in a week or so to post a link to a detailed explanation (newbie friendly).
Basically you can do this using Rules, which is very very powerful. I am quite new to D7 so had not realised just how flexible it is. I basically created a rule whereby if product gift certificate is purchased, the coupon rule creates a new coupon against the value of the product. The created coupon is then emailed to the person who bought the gift certificate (or rather, to the person they identified in a custom field on the product).
If you're confused watch ALL of the Rules tutorial videos as they make the steps above very clear (plenty of duh moments for me).
Hope this helps.