When you save a working folder as the default with the Save As Default For Project check box in the Set Working Folder dialog box, VSS stores that information in your SS.INI file. The following is an example of what it might look like.
[$/Spelling/American]
Dir (PC) = C:\DEV\SPELL\ENGLISH
The first line is a project header, indicating that variables below the header apply to the specified project. The second line uses the Dir initialization variable to specify your working folder. The platform identifier in parentheses indicates that the setting is machine-specific; if you were working on the same project on a Macintosh, you would want to specify a different working folder, or the syntax of your folder path.
It is possible to set these variables yourself in your SS.INI file, although generally it is easier to let VSS set them for you.