Thanks for the replys, rschaeferhig - you are right in saying that it is not a bad thing if there is no file there for the package to find. ...

You need to clean down the appropriate tables in the msdb, check out the following links for help on it:

http://msdn.microsoft.com/library/default.asp?url=/library/en-us/dnsqlmag01/html/LogShippinginSQLServer2000.asp

Removing and reinstalling log shipping

http://support.microsoft.com/kb/q298743/