I had some trouble with the blessed folder issue myself, but this is what I did: I dragged the active System folder into the Toast window, then in the Toast window I deleted what I did not want - to make it more of a 'bare bones' System folder. This does not touch your actual System.
You can also use an existing bootable disk's System folder instead of your active one - like the system CD that came with your computer, or a utility disk.
Thalia
[ 11-13-2001: Message edited by: thalia ]