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
I solved this problem, by doing this:
Project->Edit Project Settings->Build->Base SDK->Latest SDK (4.2)
Project->Edit Project Settings->Build->iOS Target Deployment->iOS 4.2
Project->Edit Active Target (myTarget)->Base SDK->Latest SDK (4.2)
Project->Edit Active Target (myTarget)->iOS Target Deployment->iOS 4.2
And, If you still have problems:
Click the box that says base SDK missing, and select:
Simulator -> Debug
That should do it.