For the absolute URL it would be like your first example:
Yes, the files are all in the same live server, but when I create the links in dreamweaver, I am having to point to files that are in a different dreamweaver site, so the path gets a bit convoluted.
I used menu writer to link to the pages of the existing site using the absolute URL and that seems to have worked well. In fact, they were the only pages I could get to come up. I seem to be having a template issue.