If the snow is anything like we had then it was fine stuff that readily compacted so it behaved like ice. You may need to turn DSC off in such conditions as the car will remove power to any wheel that is slipping.

DSC comes into it's own when on the move, starting off it can be a hindrance as in 'Snow' mode it won't tolerate any wheel spin and will cut power to the engine whilst attempting to brake individual wheels.
For those who haven't experienced this then those conditions have not been met and there has not been a need for reduced engine power.

I found the same issue in the snow we've had up here over the weekend. On general slippy conditions, I had it left in SGS mode which worked very well ... until you needed to power through a drift and keep the revs up ... at which point the engine cut the power just when you needed it ... which got me stuck a couple of times.

Changing the dial to mud ruts made a big difference where it allowed the wheels to spin more aggressively and pull me out.

I would I noticed a marked difference between the modes. And now consider:

Bare tarmac = normal mode
Snowy / icy roads = SGS mode
Needing to power through = Mud mode

I would happily change these on the fly as I approached each type of conditions.

Thank you for the replies and input on this issue. I feel a lot happier knowing that nothing is broken!
If we get more snow I will definately go out and experiment with the settings.
It's a shame the handbook doesn't explain things a little more clearly.

From the D3 wiki - obviously some not applicable here

Grass-Gravel-Snow (firm base slippery top):

If Low Range is selected, ride height is raised and Hill Descent Control is activated
Differentials are locked.
Engine pickup is softer, reducing sudden bursts of power.
Auto transmission upshifts early.
Sets off in Second Gear, High Range or Third Gear, Low Range
Stability systems primed to cut any slip or slide

Mud-Ruts (soft uneven muddy ground, wet and soggy sand):

Hill Descent Control is selected
Differentials are partly locked
Low Range is preferred, but not automatically recommended
If Low Range selected, ride height is raised (NB requires manual activation if trailer attached)
Transmission shifts early, remaining in higher gears for longer

Sand (soft and dry also deep gravel):

If Low Range selected, ride height is raised (NB requires manual activation if trailer attached)
Throttle is responsive to acceleration
Transmission downshifts readily
Traction and stability systems allow for increased wheel slip

Switch off DSC if extremely soft and dry

Rock Crawl (wet or dry solid unyielding ground – Rocky river crossings):

Low range must be selected
Differentials are locked
Ride height is raised (NB requires manual activation if trailer attached)
Slowest speed for Hill Descent Control is selected
Allows extreme suspension articulation
Sets off in first gear
Stability systems primed to cut any slip or slide

Hill Descent Control:

High Range: D, R and CommandShift 1
Low Range: D, R and ALL CommandShift gears
Fully functional below 50kph
Descent speed controlled by Cruise Control + or – (press and hold until desired speed)

Low Range / High Range:

Stationary:

apply foot brake
transmission to N (neutral)
activate transfer gear switch
transmission to D

On Move – High to Low: No faster than 40kph

transmission to N
push transfer gear switch to LOW and release
transmission to D. Gear won’t be selected until range change is completed.

On Move – Low to High: No faster than 60kph

transmission to N
pull transfer gear switch to HIGH and release
transmission to D. Gear won’t be selected until range change is completed.