Am i right in thinking that every xv535 is shaft driven? For that matter am i right in thinking that the xvs650's are all shaft driven as well?

Yes.

Think i read somewhere the 650 is a blown up 535 engine

yeah probably as the 250 xvs engine is a blown up xvs 125 engine

Based on the Yamaha Virago 535 engine, the Dragstar cylinders were bored an additional 5 mm to 81 mm and stroked 4 mm more to 63 mm, to net a displacement of 649 cc.

All Virago's were shaft drive with the exception of the '81-'83 Euro models.

125 Viragos are usually chain-drive.

Yep thats what threw me, i have a xvs 125 and its chain driven i just presumed that lager viragos and dragstars had chains as well.