Last night i went to turn the light off to go to bed, and I thought my Rummy Nose Tetra had gone! But I found it in the corner kinda facing downwards and its red head was very pale. I know this is a sign of stress, so I assumed I would be fishing him out the next morning for the toilet.

Luckily I just went to it now, and he's fine!:D

When I got the Rummy Nose Tetra, I bought 2, and they were from seperate tanks at my LFS - and this one was smaller and looked as though its tail was butchered. I can't remember what it was in with, but i'm assuming it was attacked. They were the last two there. ( I know they shoal and I am getting 3 more )

But I just wondered if it's tail will grow back, because my other Rummy Nose has a very bright tail, and this one is very pale - the black and white markings are very faint

How much of his tail is missing.

I would say about 2/5, It's at the top and the bottom - the tips of the tail

Are you sure it was fish nipping his fins.
As translucent fins can be finrot.
Any red streaks in the fins or a red edging.

No he's been fine since Tuesday, it's now Sunday. I think its fin nipping not rot.

And at the LFS they had 2 Rummy Noses, both in tanks next to each other - and they had different tank mates so I'm assuming this Rummy got in with the wrong crowd. The tank water at the LFS is shared with 3 tanks, so they would probably both have it if it WAS fin rot.

Assuming it is fin nipping, will it grow back?
My cherry barb attacked my Julii catfish when i put it in, and it seems to be recovering ..

Yes they will grow back.