JohnBarrow,
I think you need to do what is best for you, and sometimes going down the formal route can actually create a lot of stress for the person who is bringing the grievance. From experience, I know that because the process is prolonged, and often doesn't achieve a satisfactory outcome, the issue becomes magnified and become the focus of your whole life.
In practical terms, look at what you have achieved: You have the moral high ground; your head is aware of the issue; the line manager is going to be 'told off' and it will be recorded (in my book, that is a verbal warning, whether they want to label it as such or not); your line manager now knows you are not a pushover.
Think about what more you want to achieve by going down a grievance. Is it worth it?
I would certainly suggest that you record the issue formally in writing with your Head, and keep a copy. Perhaps something along the lines of:
Dear Head,
I refer to the recent incident where the envelope containing my staff appraisal was tampered with by XXXXX, and which you have investigated.
Given that XXX's account of the incident has changed several times, I agree that it has been difficult to establish what exactly occurred. You have advised me that XXX has been spoken to and admonished, and that this incident has been recorded on her record.
I am satisfied that this particular matter has been resolved as far as is practically possible, and I now look forward to drawing a line under it and working productively with XXXX in the future.
Could I suggest that to prevent a recurrence, it may be worth reviewing procedures for the handling and distribution of confidential staff mail?
JohnBarrowManLovesMe xx
In my view, although it may be seen as a cop out, drawing a line under it shows you in a good light, and putting it in writing records your version of events and will give you some protection against victimisation in the future. It also shows you are prepared to be the better person.
In terms of discussing it with your line manager, if she tries to talk to you again about it, I would suggest you just say, 'look, it has been dealt with and I am drawing a line under it, let's move on.'