This was resolved by adding the -conf and pointing it to the /etc/prelude/... part for each of the sensors.

For example prelude-manger --conf /etc/prelude-manager/prelude-manager.conf
as opposed to just prelude-manager

Would it be possible that you got several instance of prelude-manager installed on your system ? Could you provide the output for the following commands:

which prelude-manager

strace prelude-manager 2>&1 | grep "prelude-manager.conf" 

You are right. Our capstone group is implementing prelude along with lml,snort,ossec and nagios. We figured out that our defualt installs were going to usr/local/etc/~ but our program was running out of /etc/~ so when we registered our profiles they were bieng put in /usr/local/etc/~ so I just copied them over to /etc/prelude/profile/ - not sure if that is the best way to do it but it worked. Our agents are on, events are happening - just no correlation yet. Thanks for the help I greatly appreciate it.

last post was by me, we are also using wireshark for our verification box to verify what prelude is getting. Do you know of a better tool to use since you work with prelude so much to verify the data ?