I followed the advice received in a previous discussion ( Should "Library path" point to the source files of packages? ) and now my Library Path points to folders containing the compiled code (DCU) and NOT to the source code of my controls. The problem is that I have to duplicate the RES and DFM files and copy them from the 'source code' folder to the 'compiled' folder. It is not a elegant solution at all since, every time I change something (and I do often) to my controls I have to remember to copy the new resource files to the compiled folder.
There must be an elegant way to solve the mystery of the paths! All I want is to push the compile button and to have my program compiled. It doesn't seem so complicated. Right? Well, actually it work with my previous setup (point Delphi to source code of all controls). I just changed it to do it the way the 'good people' are doing it.
Addendum
I still think this is the wrong approach since Delphi's (scarce) documentation says that Library path should point to the "source files for the package".
Using:
Delphi 7, Win 7 (32), simple Delphi setup (single developer with no versioning system installed).