I hope I am getting closer now.
Here is a piccie of my directory structure.
NOTE: I have set the IDE program to point to the ARDUINO directory in "my documents".
Indulge my "mixing things up a bit" but here is my breakdown of the screen grab:
My documents\arduino is where things point from the IDE's settings.
In there I have a LIBRARIES directory - excuse the one pointed to just now.
I also have a SKETCHBOOKS directory - see black line
In the SKETCHBOOKS directory I have other directories with sketches in them.
The one in which I am working is the alarmclock one.
Now, when I load ANY sketch, I get this error, highlited by the 3 grouped arrows showing the library name, location and the error I am getting.