If you have been using AutoCAD 2006 for anytime you’ve most likely ran into a situation where you were not allowed to attach a XREF with a relative path. There is a simple workaround for this that seems to work rather well. It seems that the SAVE command resets whatever relative XREF’s need to function.

That said. The next time you run into this situation simply; cancel out of the XREF command. Save your drawing; and finally run the XREF command once again.