Racoon / VPN problem

[Company 2210]

I have two freebsd 5.0 boxes authenticating at stage one of the VPN, however stage 2 fails. with: 

ph2begin_r(): respond new phase 2 negotiation: 10.0.0.1[0]<=>10.0.0.2[0]
get_proposal_r(): no policy found: 10.0.0.2/32[0] 0.0.0.0/0[0] proto=any dir=in
quick_r1recv(): failed to get proposal for responder.
_ph2begin_r(): failed to pre-process packet. 

I'm a bit new too this, so I'm guessing the lack of a policy refers to my SPD Database. Setkey -DP looks like this:

0.0.0.0/0[any] 10.0.0.1[any] any
    in ipsec
    esp/tunnel/10.0.0.2-10.0.0.1/require
    spid=19 seq=1 pid=770
    refcnt=1

10.0.0.1[any] 0.0.0.0/0[any] any
    out ipsec
    esp/tunnel/10.0.0.1-10.0.0.2/require
    spid=18 seq=0 pid=770
    refcnt=1

As I understand it, this means all packets heading too or from 10.0.0.1 must be encapsulated (which is what I want, as I'm running a VPN between too FreeBSD gateway boxes). If I replace the 0.0.0.0/0 with the IP of the other boxes inteface (i.e. 10.0.0.2) the VPN works between 10.0.0.1<->10.0.0.2, but other traffic from other interfaces is not encrypted. Any help in resolving/understanding this issue is greatly appericated.

Many Thanks

Colin