For GWT Designer to be able to edit the contents of a project, it needs to understand the project structure and it needs to know where to find GWT.
The GWT Project wizard
supplied by GWT Designer sets up the project using the structure it expects.
GWT Designer also supplies a Convert project into GWT project
command that will convert an existing project into a form that GWT Designer can work with.
That command does a couple of things:
1. It adds the GWT nature and builder tp the .project file.
2. It adds GWT_HOME/gwt-user.jar to the .classpath file
GWT_HOME is used to find not only the GWT runtime files, but also the GWT development libraries (like gwt-dev-windows.jar) that are used in the design view, so it is important that that variable be set from the Designer > GWT