Further investigation. I've done 3 rides this week:
48mins 11.5km avg HR: 137 Calories: 342
42mins 18km avg HR: 117 Calories: 784
40mins 12.5km avg HT: 130 Calories: 447

The watch has stayed the same, all are logged by Garmin as "cycling" - I didn't touch it in between times.

According to calculators off the internet:
Based on hr/time/weight/age the calories for these 3 rides should be : 703, 489, 543
Based on time/speed/weight/age the calories should be: 428, 771, 440

So it does look like the calorie estimate is coming from the time and distance rather than the Heart Rate.

What's the point of the HRM then if it doesn't even use it!

mr_pedro - I'm no racer, I'm at the other end of the scale 240lbs and pretty out of shape.