I created a war and deployed it to my $CATALINA_HOME/webapps folder just fine. Then I wanted to test configuring it to point to a war at an arbitrary location such as c:\\tmp\\
Don't do that, this approach is discouraged from Tomcat 6:
For Tomcat 6, unlike Tomcat 4.x, it is NOT recommended to place elements directly in the server.xml file. This is because it makes modifying the Context configuration more invasive since the main conf/server.xml file cannot be reloaded without restarting Tomcat.