By default SQL will try to restore the database files in their original locations.  I think its pretty likely that its failing because the current file device names/locations differ from those original locations.  (e.g. different drive name or path) 

Have a look in the Transact SQL Help for the RESTORE DATABASE topic, in particular the WITH MOVE <name> TO <filename> clause.

This article walks through some of the steps:

http://support.microsoft.com/default.aspx?scid=kb;en-us;304692