I don't *think* the directories especially matter, though you may have to define them for compiling. But I think it's supposed to be a more or less temporary place. The results will go to the respective places. And I don't believe those directories would already exist on your system.
It's not exactly relevant, but might happen to say something that would help - http://www.linuxfromscratch.org/view/4.0/
- that has two sections on compiling and installing GCC and may reference in the first few sections as well. It's about 3.2 but it may apply to getting an older one on as well.
Wish somebody who'd done it would post - I *know* people around here have compiled it.