Recently I've moded my Songbird's watch folder to a new location and naturally Songbird now don't link it's library files to physical files. Is there any way I can relink those files to new location so that Songbird can play them from new location?
Afaik it's still not supported.
However, you could try the following:
It will not move the files but copy over your whole library with the given naming convention.
So, before you try this, make sure to understand it's implications.
I have not used it from the start but doing it now. That way all my newly imported media automatically moves to that folder. It's not the watched folder feature though.