Psfig first searches in the current directory for a figure (or in the specified directory if given an absolute path). If it fails to find the figure in the current directory, it optionally searches a search path of figure directories to see if the figure is present. To specify the figure search path, use
where dir1...dirn are the directories figures are to be found in.\
psfigurepath{
dir1 :dir2:...:dirn}