For links, do SE's only look at HTML, or also the directory?

I have just implemented freindly url's, and an internal link from a list page looks like this:

<a href="thingB" ...

However, as this is not in the root directory, when I hover over the list item, what I see in the browser link is:

http://localhost/[sub-directory]/thingB

My question is, from an SEO perspective would it be better if this were:

http://localhost/thingB

That is, do you think the SE's are purely interested in the HTML they see, or have they any interest in the directory as well?

Thanks for any help,
Jack.

so long as its a proper html link and not 1 from a direcotry with "," in it then it should be fine

it won't make any difference whether you use directory name in your url path.

Thanks guys, that is reassuring.
Jack.

When you link to your homepage though, don't use /index.html, use the actual url that people would type in the address bar, without the /index.html at the end. This way your internal links to your homepage will match your external links.