The top 4 entries are for locating your IWADS. You can add as many Path= lines as you wish, which is how I'm set up for Doom/Heretic/Hexen at the moment.
You should probably keep the original 4 lines for whatever.
The next 2 entries that are under [FileSearch.Directories] are for locating additional files, like PWADs, deh files, etc. And again, you may add however many in there that you wish.