Prepopulating county/state field (ajax driven field)
&quot;So for example let's say my billing address defaults to Ireland (one can setup a default value under customer profile -&gt; billing information).&quot;

If I understand you correctly perhaps do not set a default value for the country in your addressfield options. I.e. do not select a country in the options illustrated below... this way the state options are generated after the user has selected their country...

Incidentally, if you could post whatever your hook_form_alter code is and where you put it... I'd find it really useful as I am also working to pre-populate addressfields with user-account details.
Thanks!