Say you've the following paths and files :
c:\main\main.wdl // the working directory
c:\main\level1\level1.wdl
c:\main\level1\sublevel1\sublevel.wdl
c:\My Documents\images\text1.tga

Then in SED, you've to write the path like this :
path "level1";
path "level1\\sublevel1";
path "c:\\My Documents\\images";