So I took the step upgrading to Xcode 3.2.5 (iPhone SDK 4.2) and now I cannot run to device. I always see this now in the dev environment:

In my current projects, when going to the project settings I can only set the Base SDK to iOS 4.2 but this doesn't change the "Base SDK Missing" problem. :/
I can however deploy to the simulator, and change which version I want the simulator to load as.
Does anyone know how to fix this?
If I create a new project I don't get this...
Thanks