The root folder is the folder where JavaScriptMVC is installed (the folder which has funcunit, jquery, steal, documentjs, etc).
Typically, the root folder should be a public folder that serves static content.
steal.plugins references files from the root folder. Also, paths that begin with "//" also reference the root folder:
steal('//foo/bar') //-> ROOTFOLDER/foo/bar
$('#foo').html('//views/bar.ejs',{}) // uses ROOTFOLDER/views/bar.ejs