Doc X appears to Not accept relative paths for assemblies and extra content. As such, we are unable to integrate into our nightly build as c:\source\release is certainly not the buildmachine directory structure.

Is this even possible - integrating into a TFS nightly build?

We use HelpStudio 2 to run the nightly doc build, and we haven't had any problems with relative paths since DocX 5 came out.

We use a simple batch file and Cruise Control to run the build, but that's  about it.

The nightly build script we run looks like this:

%HELPSTUDIO% = path-to-hs2.exe 
del /Q /S out-helpstudio
%HELPSTUDIO% SO.Database.hsp /b /s /bp=Default
echo CHM file complete

Document! X does support relative paths throughout, but only if the relative path/file is a sub-directory of, or shares the same parent folder as, the folder containing the .dxp. This is by design to ensure that relative paths are only stored where appropriate.