The Web Root folder is the parent folder of an exploded J2EE WAR folder structure. This folder structure must not be altered. While the Web Root folder can be named differently by editing the MyEclipse project template preferences, its immediate subfolder structure must conform to the following layout and contents:
Web Root/
WEB-INF/
classes/
lib/
web.xml
It looks like web.xml is on same level as WEB-INF.
But in reality web.xml is part of WEB-INF.