We have our code base in the ROOT webapp to enable virtualization preview, and we have 2 (with the necessity to extend to more) localized content folders. The english content folder is the "pivot" folder, and we make layered folders for every other localization.
I ended up making a folder called 'content' in 'ROOT' which I placed both localized content folders in, which I entered as the source path in the deployer.
We don't want the code to get deployed along with the content because we have a Continuous Integration server running (CruiseControl) working along with our code base that is versioned in SVN that does all the code deployment.