When you first start up DuctTape it will scan you hard drive for a list of source games and mods. Wait until it is finished and you should see a list of mods/games that you currently have installed my list is shown below.
Now if you don't see the mod/game you want on the list you will need to click the find Find Mods button at the bottom of the dialog. When you do you should see something similar to this. Basically ducttape will go through and find all the mods/games installed that run on the source engine and then will ask you if you want to add it to your game-config file for easy access in the source sdk and inside ducttape. Now you will also be given as choice of engine so pick carefully or else ducttape won't work with this mod.
Ok so when you have chosen the mod and decided if you want to mont all the content that the mod mounts (for access to the base .mdls .vtf and .vmt files that are provide when creating a source mod or any others the mod mounts). Then you should be presented with the screen below. Now Before you go any further you should create a base folder to store all of the uncompiled resources that you will make for your mod. Ducttape will then ask you to select this folder. It will then scan all the sub folder and files in said folder to find files that it finds usefull e.g. Image files and smd files. It will then take theese files and add them to its own sorting directories. To demonstrate this I have created a folder for this mod and added the code generated through the sdk and also a .max file. Now in the code director there are some sample data for the .qc eyes which contains some images. So when I click ok and let ducttape sort all this out (you might get a warning about soundscapes just ignore for now) you will see that there are for folders under the root source directory in the ducttape tree view. Now if you check theese folders don't exist and are just for sorting inside of ducttape.
As you can see in this image I have something in the sorting folder Images now when this folder is expanded you will find the proper directory tree to this file.
Please note some images are shrunk to fit the page. To view full size please right click hit view image.