The current working directory for programs launched from within BugSeeker will be whatever directory BugSeeker itself was started from. To be able to customize the working directory to use, you will need to enter the path to use as the working directory in the Runtime tab of the current project's properties dialog (Project | Project Properties).
Being able to specify the working directory is available only if you create and select a custom Java runtime to use and BugSeeker itself is run in a Java 1.3 runtime or above, otherwise the working directory you specify will be ignored and the actual working directory will be the directory from which BugSeeker was started from.
If you do not meet these requirements and your application requires a specific working directory, you will have to either start BugSeeker in the desired working directory or start your application in its own JVM and use BugSeeker's remote debugging feature to connect to the your remotely started VM. See the Remote Debugging section for more details on how to do this.