New library not showing in pages 09

I just installed X1 on my Mac running snow leopard and set up a library, which has 8  references at the moment. However when in pages 09 I go insert then EndNote citation, it displays a blank library and a drop down menu says no libraries can be found, even though I have my populated library open.

I also noticed in Endnote preferences that under the first heading “libraries”  it asks which libraries I would like open when Endnote starts and this list also is blank.

It seems that even though there is a working library endnote can’t find it?

Any ideas how to rectify this?