There are four directories that JK will search for the subfolders containing resources. In order of priority they are: the install dir of JK, the folder given with the path switch, the episode folder, and then the resource folder.
The installation dir of JK is the folder containing jk.exe. It does not normally contain resource subfolders (such as cog, mat, etc), but if you add them, JK will look through them for every resource before going on to the path dir (if it's used). The path dir is only given to JK if the path switch is used. Just like with the install dir, JK will look for the resource subfolders in the path dir for every resource it loads before going to the episode or resource folders.
The episode folder contains all of JK's level files inside of gobs. Episode is different in that the resources must be inside the gob file or JK will not see them. JK does not search episode for all resources - only the ones loaded by the level's jkl. And if the level's jkl lists a resource that is not in the level's gob file, then JK will go to the resource dir.
Resource is the fourth place JK checks for resources listed in the level's jkl (including the jkl if it's not in episode), but the third place for resources listed in the items.dat and static.jkl - because JK doesn't check the level gob.
In the install dir, the path dir, and in resource, you can use gob files as well as actual windows folders. JK will search the windows directories before searching the gob files. So if you have a cog\weap_bryar.cog and a test.gob\cog\weap_bryar.cog both in JK's install directory, JK will choose the one outside the gob.
JED (a .jkl editing program) will ask you for a CD to make sure you really have JK, but all it wants is the first two smacker cutscenes - 01-02A.smk and 03-04A.smk. To fix that, create a gamedata\resource\video\ directory on one of your drives, put those two movies in it, and tell JED that's your CD drive. You can also use a mapped drive if you want. Another thing about the movies is that the first one gets really aggravating after a while - it's the opening cutscene. To skip that, just delete 01-02A.smk or rename it.