To set (or reset) the image sequence number on a canon s110 camera (and probably the s100 and other canon cameras) (for example, when getting a new camera): The next picture the camera will take will be DCIM/XXXCANON/IMG_XX02.JPG. (I don't know how having "image number reset" on will affect this.)

I don't think anything has to be done to the CANONMSC files.