When you enter a URL in the URL panel, you can enter an absolute or relative URL:

Absolute URLs are complete URLs that include the server protocol, which is usually http:// for web pages. For example, http://www.macromedia.com/support/fireworks is the absolute URL for the Adobe Fireworks Support web page. Absolute URLs remain accurate regardless of the location of the source document, but they do not link correctly if the target document is moved.

Relative URLs are relative to the folder containing the source document. These examples show the navigation syntax of relative URLs:

Relative URLs are usually the simplest ones to use for links to files that will always remain in the same folder as the current document.