Since I bought my sail boat a few months ago I haven't been able to gets enough revs out of the diesel in gear. Out of gear it revs nicely but into gear and full throttle give a fairly gentle run. Yesterday while motor sailing to the heads I asked my son to make sure the battery switch was to both. He accidentally switched it over to battery 2 and the revs increased to what seemed a good speed. Switching back to 'both' the revs dropped to their slower speed. Back to '2' and the revs came back up.
Now I can't understand how switching batteries would make such a difference.

Has anybody got any thoughts on that ?

Buy a cheap multimeter from an electronics shop (or kmart) and check your volts.
-Check each battery while disconected, they should be close to the rated voltage.
-Check the alternator is charging while the motor is running (this will often show as an overvoltage).

It's hard to say without knowing your exact wiring setup.