Kathy,
You can rename the webroot folder by opening up the .mymetadata file in the root of your project (it is hidden unless you turn off .* filtering, OR use the navigation view). We originally let people edit this from the MyEclipse-Web project properties page, but at the last minute before 2.7 GA release, we recognized a few problems with this method. We will allow it again in the future, but for the time being you can chang ehte directory name in Eclipse, and then change the value in the .mymetadata file and everything will be fine.