Hi Tony,
If I understand correctly, you are trying to reference the list for Data Validation to a range in another workbook. You are right in that you cannot do this. In fact, you cannot even reference a range on another worksheet in the same workbook. Nevertheless, there is an easy way around this. Simply assign (link) a range of cells on the data validated worksheet to the list in the other workbook (if you don't want this list to show up on the validated worksheet, simply put them in a column that you can hide). Then assign this range to the data validation list.
Damon