"cannot find the path specified" when setting up replication

[drewmania001@gmail.com]

When trying to setup relplication for SQL i am getting the following
error.
"The system cannot find the path specified"

The problem is when trying to run: sp_adddistribut iondb
line 434: RAISERROR (14113, 16, -1, @osql_cmd, 'instdist.out')

The details...
MSDE2 SP3
Win 2003 STANDARD edition
Local Admin account (windows)

( C:\Program Files\Microsoft SQL Server\MSSQL\DA TA ) exists and is
writeable

Free space on c:\ is 4.06 GB
Free on d:\ is 50+ and h: is 70+

Am able to write/read from registry

I have found SOME information (below), but im just not sure what it
does and if it will help.

http://groups.google.com.au/group/microsoft.public.sqlserver.replication/browse_thread/thread/4a967850137bfa6b/6383dc3f13412991?lnk=st&q=sql+replication+%22The+system+cannot+find+the+path+specified%22&rnum=1&hl=en#6383dc3f13412991

c:\Program Files\Microsoft SQL Server\80\Com>s napshot -RegServer
c:\Program Files\Microsoft SQL Server\80\Com>r eplmerg -RegServer
c:\Program Files\Microsoft SQL Server\80\Com>d istrib -RegServer
c:\Program Files\Microsoft SQL Server\80\Com>l ogread -RegServer
c:\Program Files\Microsoft SQL Server\80\Com>q rdrsvc -RegServer


CAN ANYONE POINT ME IN THE RIGHT DIRECTION?

What should i be looking for, have i given enough information,

CAN anyone give me a run down on what SQL is trying to do here???

Cheers drew.