I got help from the Pro's over at Qualiteam and thanks to them this now works great.
For anyone else interested in only showing the "state" field for only the US (or you could change or add any country you want).
Xcart Version 4.1.10 - change the following two bits of code in skin1/mail/html/order_invoice.tpl
Code:
{if $_userinfo.default_fields.b_state}
<tr>
<td><b>{$lng.lbl_state}:</b> </td>
<td>{$order.b_statename}</td>
</tr>
{/if}
To
Code:
{if $_userinfo.b_country eq "US"}
{if $_userinfo.default_fields.b_state}
<tr>
<td><b>{$lng.lbl_state}:</b> </td>
<td>{$order.b_statename}</td>
</tr>
{/if}
{/if}
And
Code:
{if $_userinfo.default_fields.s_state}
<tr>
<td><b>{$lng.lbl_state}:</b> </td>
<td>{$order.s_statename}</td>
</tr>
{/if}
To
Code:
{if $_userinfo.s_country eq "US"}
{if $_userinfo.default_fields.s_state}
<tr>
<td><b>{$lng.lbl_state}:</b> </td>
<td>{$order.s_statename}</td>
</tr>
{/if}
{/if}