I eventually found it at that reference but you can't really tell whether it is just a business address or home address - do you think that?
Also it doesn't say where in Rochdale area it is, so I wonder if it wasn't in Butterworth township 
No, you can't tell if it's home or business, but it was obviously a well enough known place that anyone using the directory would have known where to find Mill Bank. I don't know Rochdale and Butterworth, but at the top of that page in the directory, it says Rochdale and the following surrounding areas, then lists several other places, but not Butterworth. I suppose you could look at the total area covered by that Rochdale section and see if Butterworth lies within or outside it. Yes, you are correct that the entry would have been submitted for the directory in 1840, but you wouldn't put an entry into a directory if you planned very soon after to move house. Also, all the census for 1841 tells you is that
on census night they were in Salford and the death cert registration district tells you that the death was (or should have) occured in that
registration district - he may not have died at home in his own bed

Talking of which, I'm off to mine now!