Hi Sam,
I've used i.target, i.points and i.rectify with no problems.
I think that the problem you get with i.rectify has to do with the i.points.
During the process of marking points and entering map coordinates, you can
compute the RMS (root mean square) error for each point entered. If this RMS
value is very high you may delete that point and mark another point that is more
correct. Maybe your problem has to do with that. Check i.points again and see if
your RMS error is very high.
Hope this can help!
Have a nice day 
Cristina Seabra
cis@fct.unl.pt