PLease help me with this situation. I have been using adobe for 4 years and I have never had this issue. Anytime I create a new design and save and then try to re-open it ( after I have moved logo or background pic I used to a new folder) it gives me this error. It also does it if I try to open up something on my computer at home.
For the files on the originating computer, you will need to relink the file using the Link panel. It should give you an error dialog when opening the file asking you to relink, replace or ignore the missing file. Use the Replace option and navigate to the new file location and say OK. If you are moving the files to a new computer, you will need both the original file and the linked file in order for it to work.
To visually illustrate Larry's correct answer:
Relinking files when opening a document:
1) I have linked file "old-paper-texture.jpg" placed into my document. The file itself is located on my desktop.
2) If I move the "old-paper-texture.jpg" to another location, when I reopen the document it will ask me to relink the file. Click yes.
3) The dialog will then tell you it cannot locate the linked file. Click "Replace".
4) Choose the location to which you moved the file.
Your file should then be relinked.
Relinking files from the Links Panel:
If you aren't prompted to relink your files, Go to Window > Links to open the Links Panel. Then, click on the icon highlighted below and follow step four above.
You can also embed files into your Illustrator document. This basically creates a copy of the embedded file that is included inside the Illustrator document, so you don't need to worry about files becoming unlinked. However, this may greatly increase the size of your file, and is not always the most advisable strategy, but it's still useful to be aware of.
Simply open the flyout in the Links Panel by clicking on the icon in the upper right hand corner, then select "Imbed Image".
I hope this is helpful, and thank you Larry for your great answer.