It works!! thank you
Possibly the reason edges do not match as reported in other parts of this thread is that densification may be occurring in other geoprocessing steps and it will always occur if the output is to a Shapefile.
I got the same Reshape error working in ArcGIS 10 personal geodatabase. I saved the mxd in 9.3 to troubleshoot the problem and didn't get the error. After couple of hour of struggle, I exported the file from personal geodatabase to Shapefile format and tried Reshaping again in ArcGIS 10, that seem to work. I am having wierd issues with ArcGIS 10, hope these issues will get resolved in next version (or service pack).
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