The most likely cause of this error message is that PhonePad is looking in the wrong place for your PhonePad database.
PhonePad in Local Mode
Open the PhonePad folder and run DBConnect.
Is the Local Database Folder setting correct? Is it pointing to the correct folder? Try copy and pasting the setting into Windows Explorer to see if it can open the folder. Does it have any of the PhonePad data files (eg. Messages.dat)?
Click the small button next to the Local Database Folder setting (it has a check mark/tick on it). DBConnect will perform some checks to see if all of the settings are correct, and it will advise you what to do if any checks fail.
PhonePad in Remote Mode
Go to the server or Host PC.
Open the PhonePad folder and run ServerManager.
Check the PhonePad Data Directory setting. Is it set to the PhonePad data folder?