Thanks Nobbir
What you suggest was what I thought I had to do and still cannot get it to work.
I have a feature class TestFile which has a field Test which is a text field. I have created a variable named String of string type, and set this as a model parameter. In the Calculate Field tool dialog, I have set Input Table as TestFile, Field Name as Test and Expression as %String%. This has no value set.
What I want now is to run the model and have a window open to input a value for the variable String as a user input when the model is run. From my reading I had a vague idea that this is what would happen. When I run the model, I get an error 000622 (parameters not valid) and 000735 (Value is required).
It is this last bit (getting Arc to prompt me to enter a value for String) that does not seem to work as I thought it should work.
Any help on this would be appreciated. I am using ARc 10 on a trial installation from one of the ESRI books.