This week's book giveaway is in the OCMJEA forum. We're giving away four copies of OCM Java EE 6 Enterprise Architect Exam Guide and have Paul Allen & Joseph Bambara on-line! See this thread for details.
The <servlet-class> element identifies the class of the servlet within the classpath. This is a bad example because the servlet is not in a package and it should be.
You will never see a file path to the servlet, or any other Java class, because that's not the way Java works. Classes are searched for in the classpath, not a file path. The classes in the package structure under WEB-INF/classes are automatically added to the web app's classpath. (As are any jars in WEB-INF/lib).