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CCS4 not recognizing my defined path variable

Hi, I am trying to create a new project with a few linked c source files.  I followed the directions in http://e2e.ti.com/support/development_tools/code_composer_studio/f/81/p/3488/12395.aspx#12395 on generating a portable project.

I am running into difficulty getting CCS4 to recognize my defined path variable.  I have defined TempRoot as C:\Users\yli\Code\Dsp2 under Linked Resources.  In the project file, I changed the location to: <location>${TempRoot}/msgkernel/code/MsgKernel.c</location>.   However, when I open up the project and click on properties, I see the error message: file:/C:/Texas%20Instruments/CCS4/$%7BOptimusRoot%7D/msgkernel/code/MsgKernel.c - (does not exist)

I am thinking there is something wrong with the syntax that I am using in the project file?  

I am using CCS 4.2.1 and running on a Windows7 machine.

-Yan