That 'engine configuration file' is also referred to as the BDE's IDAPI configuration file. The BDE (Borland Database Engine) stores machine-specific settings there (not user-specific).
You can find the location of that file in the registry under:
It is stored there in key CONFIGFILE01.
A typical value would be:
C:\Program Files\Common Files\Borland Shared\BDE_D2\IDAPI32.CFG
Look if the path information is valid and if not, correct it.
If the path information seems valid and the file exists, then it could be that the file is corrupt. This can happen if the machine's BDE Administrator was running during installation. Under these circumstances, the BDE did not allow the installer to update the .CFG file. As a solution you may close the BDE Administrator and install again.
If you did not just install a new application and your IDAPI32.CFG is corrupt, you may try to create a new IDAPI32.CFG from scratch using the BDE Administrator. Or maybe take one from another machine on the network and adjust your machine specific settings e.g. temp file location.