"trace file" What? Where? How?

Maybe all you need is to regenerate ppm.xml (ppm genconfig > ppm.xml )

Yeah right!

c:\>ppm genconfig
Unknown or ambiguous command 'genconfig'; type 'help' for commands.

c:\>ppm help
Type 'help command' for more detailed help on a command.
  Commands:
    describe   - describes packages in detail
    exit       - exits the program
    help       - prints this screen, or help on 'command'
    install    - installs packages
    profiles   - manage PPM profiles
    properties - describes installed packages in detail
    q          - exits the program
    query      - queries installed packages
    quit       - exits the program
    remove     - uninstalls packages
    repository - adds, removes, or sets repositories
    s          - searches for packages in a repository
    search     - searches for packages in a repository
    settings   - view or set PPM options
    targets    - views or sets target installer backends
    tree       - shows package dependency tree
    uninstall  - uninstalls packages
    unset      - view or set PPM options
    upgrade    - shows availables upgrades for installed packages
    version    - displays the PPM version (3.1)
  Extra Help Topics: (not commands)
    ppm_migration - guide for those familiar with PPM
    prompt        - how to interpret the PPM prompt
    quickstart    - a crash course in using PPM
    unicode       - notes about unicode author names
[download]

Complexity for complexity's own sake. The downfall of pretty much every 4th generation piece of software. Occam's razor guys.

"trace file" What? Where? How?
Settings. http://aspn.activestate.com/ASPN/PPM/FAQ

Yeah right!
Well... it worked in ppm2.x, maybe try ppm2 genconfig