Similar to plug-ins and fragments, PDE treats update sites as projects. PDE attaches a special "update site" capability to these projects to be able to run nature-specific builders. The project must have an update site map (site.xml).
PDE provides a wizard for setting up an update site project. Typically, you use this wizard to set up an update site once you are done developing plug-ins, fragments and features. However, you can create the site project at any stage of development.
By default, update site project is created local to your workspace. Since you may want to host multiple versions of your plug-ins and features in this site, you may want to keep the update site outside (it its own location). In that case, change the location of the update site project during creation. If the location you specified already contains the files the wizard is about to create, it will keep them instead. This will allow you to create this project in more than one workspace and point at the same shared location.
Assuming that you have followed the previous examples, you should have "XYZ Plug-in" and "German Fragment" in your workspace already, as well as "Sample Feature" feature project. We will create an update site that can serve "Sample Feature" to the update manager.
You should now have the "Update Site" project in your workspace. The project should have "site.xml" file and a site map editor will open for editing. You should also have two folders in the project: plugins and features.