tgg,
When you first run DrMD, it will default all of the rom directories to the current directory. So if you installed DrMD to /mnt/sd/DrMD the rom browser will start in /mnt/sd/DrMD. You then need to browse to your rom directory.
If you select ".." in the rom browser it will move you up 1 directory. So if you were in /mnt/sd/DrMD and you pressed "..." you would change to the /mnt/sd directory.
Any entries with a + in front are directories, simply move though the directories until you get to the directory where you have stored all of your roms.
Once you are in the directory where your roms are, you can then save this as your default rom directory. When you are in the directory you want, return to the MD/SMS/GG option screen. Scroll to the bottom and select "Save Current Rom Directory". This will save the directory as the default. You will have to repeat this process for MD,SMS and GG.
Let me know if that still does make any sense.
Reesy