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In "CVS Repositories" view I right clicked on a module and clicked "Check Out As...". I chose "Check out as a project in the workspace" and changed the project name to something other than the default (i.e. changed "foo" to "foo- test". I then clicked "Next >". On this next screen, the "Use default workspace location" checkbox was checked. Underneath, the "Location" field listed the path to my workspace with the original project name (i.e. it listed ".../workspace/foo" instead of ".../workspace/foo-test"). If I unchecked "Use default..." and re-checked it, it would correct itself. This seems to be just a harmless label problem. If you leave it showing incorrectly and click finish, it will create a project in the correct directory (not the one it showed).
Post 3.0
*** This bug has been marked as a duplicate of 45623 ***