ArcGIS Desktop 9.3.1 - Unable to set the data source for a new layer.

Discussion created by tulleymore on Apr 6, 2013
I was working on a project in ArcGIS on a different computer while at my college class, saved my files and now finishing the map on my work computer.  All of the files I have used previously have the data source set, except for a new one I created from a text file.  I have been unable to set the datasource because there are no projections to choose from, but when I drill down to that folder in windows explorer the projections are there.  I think I need to connect to a datasource, but I don't see where I do this.  I will say that my work folder for my files is in a different location than C:\ProgramsFiles\ArcGIS.  Any assistance would be greatly appreciated!

I've attached a screen snapshot.