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If you create a project with a name that differs from the last part of the directory it lives in, builds fail. E.g., create a project named "greetings" located in "c:/eclipse/workspace/hello". Add a file, compile, then try to run. It fails. AJDT creates output in a directory with the *name* of project (greetings), not the directory (hello).
*** Bug 36740 has been marked as a duplicate of this bug. ***
Builds no longer fail as AJDT now computes the path correctly. Note however that eclipse only allows you to specify an output directory relative to the project dir in the workspace (even if the src dir is elsewhere) - look at the java build properties (source tab) and you'll see what I mean. A project set up as you describe now builds and runs correctly, with the caveat that the output dir specified must be relative to the project dir as described previously.