You should put MyFaces .jars to WEB-INF/lib folder of your JSF project. Or if you don't want to do it manually, go to your project preferences and modify the JSF facet configuration, i.e. right-click your project, select Properties > Project Facets, then check JavaServer Faces and follow the link 'Further Configuration required...' In the 'Component LIbraries' section of the wizard you can add myfaces libraries or whatever you need.
How to add custom components into the JBoss Tools Pallete see here: http://www.redhat.com/docs/en-US/JBoss_Developer_Studio/en/jsf/html_single/index.html#AddingCustomJSFTagsToTheRedHatPalette7433
Thanks. Let me just state, I have no problem adding the .jars manually.
My motivation for this inquiry is to start a project with a clean slate, get all the .xml/set-up files created correctly (at least initially).
So my main question is how to set up MyFaces 1.2.6 so I can see it here:
Just in case, here's the link:
If you want to have MyFaces 1.2 project set properly you have to do it manually: create JSF project via New JSF project; update libs. Or you can update old MyFaces project template which is used by this wizard. See /plugins/org.jboss.tools.common.projecttemplates_*/templates/MyFaces