Writing a field formatter for D6
Well I did this in a slightly different way. By using hook_preprocess_content_field(), I search through all of the fields in a node and do a str_replace() on those items. This does solve my problem but I'm open to a more elegant solution. 

function MODULE_preprocess_content_field(&amp;$variables) {

  for ($i=0; $i &lt; count($variables['items']); $i++) {
    $searchfor = variable_get('file_directory_path') . '/special_folder';
    $replacewh = 'portfolio/asset';
    $variables['items'][$i]['filepath'] = str_replace($searchfor, $replacewh, $variables['items'][$i]['filepath']);
    $variables['items'][$i]['view'] = str_replace($searchfor, $replacewh, $variables['items'][$i]['view']);
  }
}


Side note: The path portfolio/asset is part of this same module and defined in hook_menu. I would have preferred to have this done with a field formatter in the above code, but I've got to move on.