It is definitely possible, I have seen it done. The approach was to put everything under a home grown servlet, and manually dispatch calls to jsps. That manual code then checked the age of the JSP and copied the file to the "appropriate place". This code was burried in a whole application.
A simpler but more manual approach would be to copy all changed jsps every time they are modified using an ant script.
Yes, I am vague, I am just trying to get a basic JBoss environment going myself. The lack of useful documentation is a big issue.
You can use a war directory, that is a directory named something.war and with a war directory structure below it.
But using ant its not a big deal to make a war file and put it in the deploy directory when you have made your changes.
Even for development purposes, i would advise you to create ant script (you can get a sample one from apache site), and use it to build the war file and deploy.