Okay, yahooing around I found I have to set the path. But I still get this error:

root@server167:zope/instance2/var (177) set PYTHONPATH=/usr/local/zope/278/lib/python                                        root@server167:zope/instance2/var (178) python /usr/local/zope/278/lib/python/ZODB/fsrecover.py Data.fs Data.fs.recover
Traceback (most recent call last):
  File "/usr/local/zope/278/lib/python/ZODB/fsrecover.py", line 80, in ?
    import ZODB
ImportError: No module named ZODB

The python is the correct one. I re-set python so that the one that comes up first in the path is the one Zope uses.
TIA,
Nancy