I ran into the same problem. The situation I ran into was using JBuilder to launch JBoss for debugging.
If I put the JBuilder project file in the same location as the run.bat file, everything works fine.
If I start JBoss from inside JBuilder using a project file that is in a different directory other than the JBOSS_DIST/bin directory, I get the "Missing default web.xml" error message when JBoss starts up.
Since JBuilder uses the location of the JBuilder project file as the current working directory when executing or debugging in JBuilder, I suspect that there is a bug in JBoss or the Catalina integration into JBoss that is incorrectly using the System property "user.dir".
A different twist on the same problem... running the 3.0.0 release with Tomcat 4.0.3
Use java version "1.3.1_02-b02" -> Problem occurs
Use java version "1.3.1-b24" -> Works fine!
I have no idea why this is, but it sounds like a java bug, not a jboss bug.
I don't believe that this is a Java JDK bug. I was using JDK 1.4 with JBoss when I saw the problem.
I have the same probleme when I create a war using JBuilder5 and deploy this war into JBoss...
I tried all sort of setting to create the war but no luck until now.
Moving from JBoss-2.4.3_Tomcat-3.2.3 to jboss-3.0.0_tomcat-4.0.3 I got the same error when deploying WARs. I have Xalan.jar in the JBOSS_CLASSPATH which causes the (my) problem. Once removed the message goes away! I am still looking into it and will keep you posted!