It isn't mapped to any directory on the server. You either need to run
the update command on your client machine in the directory you checked
out with the GUI (the GUI may allow you to do that, but I have no idea
which GUI you're using and it doesn't really matter since I'm not very
familiar with any of them anyway), or you need to do a checkout on the
server and then run the update in that directory. (It's also possible
to combine the update with the checkout and save a command, but given
your obvious confusion, that's probably not a good idea.)