This seems like the correct document root based on your settings, the error is letting you know that the URL prefix that you have for the testing server is not rite. The location that maps to the URL prefix you have does not match the location of the files on your machine.
You should be able to use a browser to go to the page directly, if you can't do this in a browser then you are not going to get the correct result when you try to visit it from DW.
Generally speaking the webroot file location will match up with the URL localhost/, so if you have the files in the root of your webserver you should be able to access them by going to index.html. The URL for the root of the site should be listed somewhere in your control area for MAMP.