Hey
Was having a play with settings bundles just before in xcode 3.2.3 (sdk 4.0.1), but then I deleted the settings.bundle folder and 'also moved to trash'ed.
Now every time I build I have a dialogue "Save before building?" and the root.plist file there, but greyed out and unselectable.
I checked the directory where it was claiming to be, but nothing there.
Its getting annoying. Any ideas?