You can't set  a URL for a folder, list or library. The best that can be done is
to Host header an entire Site Collection so it has its own URL that is different
from the Web Application.

You can also set  up a vanity starting point. The user  types in htt://project and
they get redirected to http://sitename/xyz/pqr/abc. Less typing for them.

Also, you might be able to use ISA 2006 to rewrite some URLs. The best solution
of course is to not do this, but that's not always an option.

I'll have to look at that link more closely. Since this is done in IIS, you'll
need to make the same changes in all of your Web Front Ends (assuming you have
more than one) and be sure to plan for this in any recovery plan you have, since
SharePoint will know nothing about it and won't back it up.

Right now I have the vanity url's set  up so, they type in ABC and it goes to
http://sharepoint/sites/ABC