I'm developing a website, and in the near future I want to calculate distances between postcodes. For example, postcode A might be in S1 and postcode B might be in S17.

Does anyone know of any services that will provide this so I can use it in my website?

Type the postcode in Google. At or near the top, you should see a link to Google Maps.
Click the map to open the link.
Click in the speech bubble on "Get directions to (or from) here, Enter the next postcode.

Easy.

Type the postcode in Google. At or near the top, you should see a link to Google Maps.
Click the map to open the link.
Click in the speech bubble on "Get directions to (or from) here, Enter the next postcode.

Easy.

Sorry what I meant was I need the facility embedded in my application. So using my website, an end user can say "I only want to see establishments within 5 miles of S1 1DJ" for example. Then, the application will use a postcode API (from somewhere!) to take the establishments postcode and detect whether its within 5 miles of S1 1DJ.

Google maps have an API you can use to work against to embed into your own site(s). You will need to register with them to get a key to enable use of said API, but it's quick and easy.

Thanks, I'll take a look

I have done this before, basically there is a database of postcodes and their coordinates available on the web somewhere. Plonk that into MySQL and it will let you easily calculate the (straight line) distance between two postcodes in php.

Its quite simple, Google also offers the calculate route option

I have the database adaline is talking about. I used it to build a Directory last year. Send me a PM if you still need it :).