Have a look at this entry, gives an idea of a good layout: http://www.myeclipseide.com/FAQ+index-myfaq-yes-id_cat-30.html#111
From there you can see that the WebRoot is basically an exploded WAR file. This is on purpose. Your project may contain other resources like a source tree, extra config files, compile-time-libraries, API docs, license docs, etc. All of this would go outside of your WebRoot in the root of your Project and, if necessary, get built into your WebRoot somewhere. Then when your project is deployed to your app server, MyEclipse packages up your WebRoot and everything under it, and creates the WAR file for you.