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I have a small (about 1 ft high) purple sage Salvia officinalis 'Purpurea' which is the first I have ever managed to get to survive in my garden. It is looking decidedly tatty and now that winter is over, I'd like to tidy it up. My first thought would be to pick off the tatty leaves and also take about a couple inches of the tops to encourage fresh leaves, but would this have the desired result? I have been told that I can't cut it back hard to the wood.

That's what I'd do - I think as long as you've got new growth coming from the base and you don't chop anything below that (ie into old wood) you should be OK.  Looks nice and healthy, too, so should recover quickly from a bit of pruning.

Sounds OK. I tend to keep pinching out the tops of sage plants during the season to keep them nice & bushy & stop any legginess creeping in.