See InstallationProblem.
-- MartinGregory - 30 Mar 2004
Probably what testenv should do is check for a TWiki release of Feb 2003 or later, and only then complain if setlib.cfg is missing. The idea is that testenv should be able to work in older TWikis that don't need setlib.cfg, hence the logic you noticed - the SupportGuidelines encourage people to download the very latest version of testenv to help diagnose problems.
Worth adding a link to this page on ImproveTestenv, where this was discussed a while back.
-- RichardDonkin - 30 Mar 2004