The PROJECT ROOT DIRECTORY is the name of the directory in which all project information is kept: the web content, the Java sources, etc. 
Example: "c:/projects/mytest"

The CONTEXT ROOT is the name that is used to access the project via URL: http://host:port/contextroot/...
Example: "mytest"

The following files are created when creating a project:

(1) The PROJECT DIRECTORY is created. Inside the directory there is a /src directory to keep the Java sources and a /webcontent directory, that represents the content of a web application. The /webcontent is already configured to hold the JSF and Enterprise Client files which are required within a web application.

(2) A project definition is created inside the Enterprise Client tool environment.

