New Site Setup Root Folder Issues

I have DW CS4, on a PC, using Windows XP...I have been using DW CS4 for several years and have not had this problem before. I went into Site Setup and started creating a new site - as usual using the Advanced Settings. When I finish with the Local Info and click to go to the Remote Info I receive the following error: "The root folder you have chosen is inside the folder for site 'DW_CS4_Class1'. This may cause some operations, such as synchronization, to work incorrectly. Proceed anyway?"

I do NOT have the site that is referenced anywhere on my system! I have searched everywhere (under my 'local sites' folder, in my C drive, in my D drive, etc.)! The referenced site does NOT exist!

Please, if anyone can advise what to do about this; how to make it not say this again; if I say 'OK' to the issue what side affects will my new site experience because of this? Please help! Any guidance will be greatly appreciated! Thank you!