The following simple illustration portrays your test configuration:
image
This illustration is included to help you understand which parts of the test process run on which VM. This is important to understand when you configure the classpath for each of the VMs. In the illustration, the JavaTest harness and your application run in different processes. Note that there are multiple instances of the Test VM -- a new VM is started for every test.

The Configuration Editor does as much as it can to set the classpaths correctly, but if you get errors about classes not being found, check that the classpaths are set correctly.