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You can find this file in [pentaho_project]/server/pentaho/test/org/pentaho/test/TestSettings.java.
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Change the value of the DEFAULT_LIB_PATH field to point to the third-party/lib directory in your pentaho project. Note that this must be an absolute path. For example, my DEFAULT_LIB_PATH value is e:/workspace_1.6/pentaho/third-party/lib.
2. Add test-lib jars to Build Path
The test cases will complain about ClassDefNotFound problems unless you add teh following jars to your buildpath:
- ehcache.jar
- cglib.jar
Both of these jars can be found in the [pentaho_project]third-party\test-lib directory. You add them to your build path in Eclipse through the Project Properties dialog.