Puzzled by Config files

I created a package, created an XML Config file, created a deployment utility and then deployed to server. I scheduled it with agent and I get this error (changed the package name in the error to IMPORT to make it more readable):

Description: The configuration file name "C:\Documents and Settings\chris\My Documents\Visual Studio 2005\Projects\IMPORT\IMPORT\IMPORT.dtsConfig" is not valid. Check the configuration file name. End Warning Warning: 2006-07-12 13:11:39.96 Code: 0x80012059 Source: IMPORT Description: Failed to load at least one of the configuration entries for the package. Check configurations entries and previous warnings to see descriptions of which configuration failed. End Warning Progress: 2006-07-12 13:11:40.56 Source: Import Data Validating: 0% complete End Progress Progress: 2006-07-12 13:11:40.56 Source:... Process Exit Code 1. The step failed.

So basically its trying to point to a config file on my dev workstation. When I created the deploy utility it created a config file in the Deployment directory with the Manifest and the package. I installed from the deployment directory. When installing it asked where I wanted to install and I left it the default of "C:\Program Files\Microsoft SQL Server\90\DTS\Packages\IMPORT" and if I look in that folder the IMPORT.dtsconfig is there.

Ideas of where I went wrong? I want to make sure I understand the whole configuration file notion correctly as I am starting to roll a bunch of packages with config files out to production. I've done the tutorial and thought it was straightforward and made sense. I can fix it by editing the xml of the package and removing the line pointing to my dev box - just want to know what I am doing wrong :)

Nevermind... Found lots of other people with similar issues in diff threads on this forum. This whole config file thing is pretty confusing. When you do the install from the deployment folder it will show all the values from the config file in the deployment directory - but it doesn't use any of them when you actually run the package.

I am really not sure why they put the dtsconfig file in the deployment folder at all - all that does is confuse things. I had been placing the production config file over the one in the deployment folder and assumed it would use it... not so.