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Change API version of Eclipse force.com project

I have a package.xml that I copied from one machine to an older machine. However, when I do a refresh from server, I get the error:
Entity Type XXX is not available in this API version
The entities are CustomLabels, CustomObjectTranslation and ReportType
Is this just a setting somewhere in the project? How can I correct this?
Best Answer chosen by Admin (Salesforce Developers) 
If I were you I'd just recreate the project in the latest version of the IDE.  That has served me best up to now.