I have found alternative way to one described in great article by Laki Roganovic
You need:
Eclipse 3.1
Tomcat 5.5
TomcatPlugin for eclipse
Sun's JDK 5.0
To install and activate TomcatPlugin:
- Download tomcatPluginVxxx.zip
- Unzip it in eclipse /plugins directory
(for me everything was working without activating it)
- Plugin activation for Eclipse 2.1 :
select menu 'Window->Customize Perspective...', expand 'Others' and check 'Tomcat'
- Plugin activation for Eclipse 3.0 :
select menu 'Window->Customize Perspective...->Commands', and check 'Tomcat' in 'Available command groups'
- Set Tomcat home : Window -> Preferences, select Tomcat and set Tomcat home (just browse to your Tomcat's installation directory)
- This plugin launches Tomcat using the default JRE checked in Eclipe preferences window.
To set a JDK as default JRE for Eclipse open the preference window : Window -> Preferences -> Java -> Installed JREs.
This JRE must be a JDK (This is a Tomcat prerequisite).
- The plugin sets itself Tomcat classpath and bootclasspath. Use Preferences -> Tomcat ->JVM Settings, only if you need specific settings.
This plugin adds three buttons to your eclipse (start, stop and restart tomcat).
Now when you want to make new application just create folder in Tomcats webapps directory (for example C:\Program Files\Apache Software Foundation\Tomcat 5.5\webapps\YourNewApplication) and in eclipse create new project from existing source (File -> New -> Project -> Java Project) choose "Create project from existing source" and Browse to your created directory.
Just remember that when you add new folder/project to Tomcats directory you have to restart Tomcat.
Now you can write your applications in your favourite IDE (when you change something just save it in eclipse and refresh it in your browser (click refresh minimum twice 
If you have problem saying that no java compiler (javac.exe) was found you have to add path to it:
1. Click on START (lower left)
2. Under "Settings" click on "Control Panel"
3. Switch to "classic view" (upper left) – not "category view"
4. Click on the "System" icon.
5. Click on the "Advanced" tab.
6. Click on the "Environment Variables" button (bottom).
7. Highlight "PATH" (in the top window) and click the "edit" button.
NOTE: UNDER NO CIRCUMSTANCES SHOULD YOU EDIT OR MODIFY AND OF THE "SYSTEM VARIABLES" – you could render your entire computer unusable! –
8. Edit the "PATH" so it begins C:\Program Files\Java\jdk1.5.0_02\bin; (note: if you install Java into a different directory, you may need to change the directory from that listed above)
9. For example, the full "PATH" on my computer is:
C:\Program Files\Java\jdk1.5.0_02\bin;C:\Program Files\SSH Communications Security\SSH Secure Shell
10. After you have finished editing the PATH, click "OK". You are done setting your PATH. Now you have to create a new variable, called your CLASSPATH.
11. Click on the "NEW" button below the top window.
12. Under 'variable name' type CLASSPATH
13. Under 'variable value' type . (yes, type a single period).
14. Click OK.
15. EXIT the control panel.
16. Restart your computer.
(from http://www.cs.ucsb.edu/~teliot/Path_and_Classpath.htm
)
Hope this helps 
Please write comments if you have one.