Classic doesn't work after updating to 10.1


U.S.D.A. Prime
I've got two partitons on my 10GB hard drive: 5GB for OS 9.2.1 and 5GB for OS X 10.1. Classic worked under 10.0.4, but now it doesn't.

When I start Classic from under 10.1 now, it tells me again (like 10.0.4 did the first time I started Classic) that some items need to be added for whatever... "OK" or "Cancel"... I hit "OK" and it says "An error was encountered while trying to update your System Folder with Classic-specific resources." If I hit Cancel, of course, it does just that -- cancels the classic startup.

Classic won't launch. I need it! Any ideas? Anyone else had this problem?
The only thing you mentioned that I haven't tried is doing a fresh install of 9.2.1 -- which I'd REALLY like to avoid! I can't believe the install went so smoothly -- I'm so pleased with 10.1 -- and now this happens! Argh!

Anyone else seen this problem?

Thanks for your help!