Well, I called the nursery and spoke with the manager. He's a nice enough guy. He confirmed the tree was grown from a seedling, not grafted. It was correction pruned when it was younger. So that's one mystery solved.
However, I showed him the planting pics that I posted here and he told me to plant the tree basically at the level of the pruning wound - i.e. slightly higher than it is now.
I asked him about the adventitious roots and he said they should be buried.
I don't think he has the education or perhaps experience to understand what has happened. I'm not going to be the one to educate him, I got the distinct impression I would be wasting my breath. He said he would warranty the tree in the spring if there was a problem with it. I don't think a return/refund at this point is going to work. I gotta admit, I'm a little tired of educating/battling my local nurseries. I've got a background in biology (Honours BSc in Biology) so I'm open minded to stuff like this. I have some knowledge of plant form and function on a molecular level but it's funny how I was never taught practical knowledge such as how to correctly plant a tree. Or maybe I was at the university pub that lecture...
I DID dig down to the root flare. It is about another 2" deeper than the last photo I took. The root stock has a bit of a curve to it but I found the root flare and the first order roots.
I'm thinking that I might re-plant the tree at the proper height and expose the root flare and carefully prune off the adventitious roots. If the original root system cannot support the tree in the Spring, so be it, I'll get a new one.
Sound like a plan? Thanks again, particularily to Guy and Mike, for your help/advice.
P.S. I found an excellent resource about these exact roots -
http://www.dnr.wa.gov/wcfc/treelink/treelinkspr04.pdf
Here's an extract -
Impacts of Buried Root
Collars on Trees
Trees with buried root collars are often
weakened, stressed and predisposed to
secondary pests and diseases. Buried root
collars may stimulate the formation of
adventitious roots near the soil surface
from the trunk tissues. Adventitious roots
attempt to compensate for the lack of
oxygen not available to the buried roots.
While the adventitious roots supply the
tree with some water, nutrients and
oxygen, they are not usually large enough
to provide mechanical support for an
older tree. Consequently, a tree may
appear reasonably healthy, only to fail
eventually as the main roots deteriorate to
the point where they are no longer able to
support the tree.