Some users have understandably been confused about the folders that need to be specified when creating a new WebLogic runtime (either directly or through the new Server wizard). This FAQ hopefully clarifies the locations to specify.
For the “BEA home directory“, specify the folder containing the domain-registry.xml file. This will also include the folder in which the actual WebLogic server is installed and may contain other software that is common to a number of BEA products (“BEA” is the name of the company that previously owned the WebLogic product now owned by Oracle). For example, on my Linux machine this folder is /home/tony/dev/servers/weblogic12/wls12210, though the key folder here is wls12210.
For the “WebLogic installation directory“, specify the folder containing the server folder, which itself contains the main server executable code, though the parent folder will contain other server code. The parent folder is typically named wlserver, and is a child of the BEA home directory. On my Linux machine, for example, the WebLogic installation directory is /home/tony/dev/servers/weblogic12/wls12210/wlserver. Note that you will see an error message, at the top of the wizard page for specifying most runtime details, about an invalid WebLogic installation directory until it is specified correctly; once you select the correct location, you may continue to see an error message but it will be concerning a invalid domain directory, so ensure you select that from the browse button against that text field.