Selecting Set Paths from the lim menu brings up a dialog box (Window 3.6) to configure the various paths lim uses to find things.
The RPP search path uses the same syntax as your familiar PATH environment variable. lim uses the search path to look for packages and series files. You may wish to set things up such that the search path includes the rpps directory on the RHC Linux CD-ROM (a standard CD-ROM installation will already be set up this way).
The RPP record directory is where all the installation records are kept. There is usually no reason to change this.
The update directory is realted to update packages, which will not be supported in the future. Do not use it. The same is true for the user profile directory and boot script directory.