I ran into the path length problem because I wanted to keep Sab's working folders out of the root of the hard drive. So by the time you prepend something like "C:\Documents and Settings\theuser\My Documents\sabnzbd", you've used up a pretty good chunk of the 260 characters normally allowed. While Windows does support a prefix, "\\?\", that permits an extended-length path for a maximum total path length of 32,767 characters (e.g. "\\?\C:\Documents and Settings\theuser\My Documents\sabnzbd"), supporting that is tricky at best. See
http://msdn.microsoft.com/en-us/library ... 85%29.aspx for Windows path name details.
The solution that I turned to was a junction point. A junction point allows the creation of a folder in one location that redirects to another folder in another location. So I created a folder "c:\sab" and pointed it to "C:\Documents and Settings\theuser\My Documents\sabnzbd", giving me 52 more characters to play with. Since doing that, I've had no issues.
There is a freeware utility called "Junction Link Magic" that makes managing junction points a snap. See
http://www.rekenwonder.com/linkmagic.htm. That page also goes into details on junction points.
Of course, you could just reconfigure SabNZBD to work with a regular folder "c:\sab" and move what you currently have to there. In my case, the only problem experienced was during extraction. I have a bunch of scripts and media players and so forth that are configured to look at the original folder. By using a junction point, I'm able to keep all happy with the least amount of rejiggering.