diff --git a/lib/libsde.in b/lib/libsde.in
index 91468bc..3895033 100644
--- a/lib/libsde.in
+++ b/lib/libsde.in
@@ -2,7 +2,7 @@
 # This copyright note is auto-generated by ./scripts/Create-CopyPatch.
 # 
 # Filename: lib/libsde.in
-# Copyright (C) 2006 The OpenSDE Project
+# Copyright (C) 2006 - 2007 The OpenSDE Project
 # 
 # More information can be found in the files COPYING and README.
 # 
@@ -16,16 +16,18 @@
 #
 sdever=trunk
 
-[ -n "$SDEROOT" ] || SDEROOT=.
+[ -n "$SDEROOT" ] || SDEROOT='.'
 export SDEROOT
 
 . $SDEROOT/lib/term-functions.in
 
 # default settings
 #
-SDESETTINGS="$HOME/.sde/settings"
+[ -n "$SDESETTINGS" ] || SDESETTINGS="$HOME/.sde/settings"
+export SDESETTINGS
+
 if [ ! -e "$SDESETTINGS" ]; then
-	mkdir -p "$HOME/.sde"
+	mkdir -p "${SDESETTINGS%/*}"
 	touch "$SDESETTINGS"
 	chmod 600 "$SDESETTINGS"
 fi