Seems funny that a paint program requires a specific icon library? No idea, never used it. I'm still stuck on Brilliance and DPaint when I want to mess around with paint software, sorry!
Also +1 for the Peter K. icon library. 
I don't use Personal Paint personally, but perhaps it can load and save Newicons. If so, then that would be the reason why it tries to seek the newicon.library. If you don't use Newicons, don't bother with it.
