More than six months later . . .
I'm having more path related issues.
On export I usually diagnose my models. More than half of the time I'm getting an error warning about my texture path being outside of my project. The file that it is refering to is inside the project, but the path it lists in the error is relative. It is a default texture that the .fx file looks for in case I don't assign one for that parameter.
[ERROR] Material [Asset2] used by [pallet] references an image file [..\textures\default_n.tga] that is outside of an XNA project
I opened my exported .xsi in a text editor to see what the paths looked like there. Everything I manually assigned in XSI got an absolute path. Textures and the .fx.
Shouldn't they be ralative? I am quite confused and could use a little clarification. It seems like the kind of problem that would come from not setting a project, but I did using connect to xna project under the Xna Game Studio menu.