Index: source/creator/creator.c
===================================================================
--- source/creator/creator.c	(revision 13018)
+++ source/creator/creator.c	(working copy)
@@ -619,7 +619,15 @@
 				a++;
 				if (a < argc){
 					if(G.scene) {
-						BLI_strncpy(G.scene->r.pic, argv[a], FILE_MAXDIR);
+						char filename[FILE_MAXDIR + FILE_MAXFILE];
+						char dirname[FILE_MAXDIR + FILE_MAXFILE];
+						filename[0] = '\0';
+						BLI_make_file_string("/", filename,  BLI_getwdN(dirname), argv[a]);
+						
+						if (filename[0]=='\0')
+							BLI_strncpy(filename, argv[a], sizeof(filename));
+						
+						BLI_strncpy(G.scene->r.pic, filename, FILE_MAXDIR);
 					} else {
 						printf("\nError: no blend loaded. cannot use '-o'.\n");
 					}
@@ -687,9 +695,18 @@
 				break;
 			}
 		}
-		else {			
+		else {
+			/* Make the path absolute */
+			char filename[FILE_MAXDIR + FILE_MAXFILE];
+			char dirname[FILE_MAXDIR + FILE_MAXFILE];
+			filename[0] = '\0';
+			BLI_make_file_string("/", filename,  BLI_getwdN(dirname), argv[a]);
+			
+			if (filename[0]=='\0')
+				BLI_strncpy(filename, argv[a], sizeof(filename));
+			
 			if (G.background) {
-				BKE_read_file(argv[a], NULL);
+				BKE_read_file(filename, NULL);
 				sound_initialize_sounds();
 
 				/* happens for the UI on file reading too */
@@ -698,7 +715,7 @@
 			} else {
 				/* we are not running in background mode here, but start blender in UI mode with 
 				   a file - this should do everything a 'load file' does */
-				BIF_read_file(argv[a]);
+				BIF_read_file(filename);
 			}			
 		}
 	}