If Andrew has the right idea about why you want reports in a subfolder. Then my second post about setup also is right, but more important is you have to exclude reports you later want to refer to in the EXE as external report files. That enables what Andrew says:
Andrew Mozley said:
let the user modify some reports, and these are kept in REPLOCAL
I have the feeling that your major problem is that. Because when you still keep reports as included in the build of an EXE, it won't matter if you address them with a relative or absolute path where they are outside of the EXE at runtime, the VFP runtime will always look for an FRX within the EXE first and use that. So enabling usage of external reports means first excluding them from the build.
You're also talking about images and more, though. So I think I have not yet understood your whole problem. Images you use as pictures in image controls are always also embedded/included in the EXE. It's actually harder to exclude images, as simply using them on your form at design time, they will become part of the project and part of the exe, even if you don't just exclude them from the build but remove them from the project manager, a build adds them back to the PJX, because that's VFPs automatism to keep all necessary files in.
So, for example using different images as different branding or different looks/themes/skins, maybe even images with texts in different languages for internationalization have to be coped with on more than the decision to include them in the PJX files and include or exclude them in a build. For the ability to use images dymically depending on settings, you can't even specify an image at designtime, the controls that should load different image versions depending on configuration of theme or language must be set at runtime, ie you couldn't set Picture properties while you design, but have to set them when a form is started.
Well, you could have default images used at design time, like you could write all English texts to labels and headers and button captions, etc, but at runtime in initialization you of course need to change them. And then they must have different names as the default images with their names become part of the EXE. And that would also mean even if you reconfigure to some setting not needing the default images of the EXE, they are still in there. So a full separation needs design without graphics and instead set those at runtime, which makes it unpractical to design something.
I don't think you're aware of how this works with most other programming languages, where there are resource DLLs that can contain images and also texts and you could easily organize the internationalization by compiling a DLL for every language, that's not the case with VFP, the specific type of DLLs defined by Windows does not work with VFP controls picture properties. They are always set to image file names, and those are then first looked for within the EXE and only if no image of that name is embedded images on HDD are used.
Chriss