http://community.heroengine.com/forums/index.php/topic,1483.msg7729.html#msg7729That might be of help if you already setup the correct path on your local machine.
Short version:
Create a folder in your C:/ drive and call it "HE".
Make sure that that folder has the same structure as the repository (so the HE folder on your local should have the same folders and its structure like on the repository).
Example:
C:/HE/staticassets on your local machine is the same as HE/staticassets on the repository.
Make sure that you do NOT have spaces or symbols in your filepath nor filenames nor in the heromaterial. Once you set this up correctly, go the the thread I posted and follow those steps.