Yes, it does. The script is generic. It'll work no matter where LimeWire is installed. The line:

cd `dirname $0`

Changes to the LimeWire directory. The $0 variable returns the command used to execute the script. Then the script changes to ~/.limewire so limewire will write it's config files there. The idea is that you can install the LimeWire .tgz under /usr/local as root and then allow multiple users to run LimeWire with multiple configs.

If you run the script with, say:

sh runlime.sh

Then $0 won't refer to the limewire directory. Run it like ./runlime.sh or /usr/local/LimeWire/runlime.sh. Or, as you suggested, write in the directory names manually. :-)