Set up Your Website Files
When you create a local site, you can place any existing assets (images or other pieces of content) in the local site’s root folder (the main folder for the site). Then when you’re ready to add content to your pages, the assets are there and ready for you to use. When you defined your site you designated a local root folder.
The example of where to create your local root was, where local_site in my case was Nicholson's Lesson Blues:
C:/Documents and Settings/your_user_name/Local Settings/Nicholson's Lesson Plan Blues
Now you will begin making your web pages for your site. The home page is the first page that will display when your page loads and when saving this file to the local_sites folder above, it has to be saved as index. This lets the server know that this is the first or home page of your site. This file is where you will save all the files associated with your website.
Local folder is your working directory. Dreamweaver refers to this folder as your local site. The local folder is usually a folder on your hard disk.
Remote folder is where you store your files, depending on your environment, for testing, production, collaboration, and publication. Dreamweaver refers to this folder as your remote site. The remote folder is a folder on the firn's server that houses your web space. The computer running the this server is the computer that makes your site publicly available on the web.
To change between local and remote folders, click on the Files panel the drop down the left drop down menu text box: