Could someone explain how I add custom content to the levelled list, so that it appears in containers and on bandits. I'm new to the construction set and I can't work it out.

Check out the http://cs.elderscrolls.com/constwiki/index.php/Category:Leveled_Lists page of the CS Wiki. That should help you out quite a bit.

Thanks that was useful, but does a Bandit have a separate levelled list like Adventurers or must I include the items elsewhere?

Bandits use Leveled Lists for their equipment. What leveled lists they use depends on what type of bandit it is (i.e. Bowman, Hedge Wizard etc). They use separate leveled lists for each equipment slot, which is why you sometimes see bandits with with mixed armor at higher levels (i.e. Elven Boots, Mithril Greaves, Chainmail Gauntlets and a Glass Cuirass). For these lists, the Calculate for all levels <= PC Level flag is checked. If that flag was unchecked, each bandit would always have the best equipment available for the Player's level.