Links to files and directories can be relative. Just enable the 'store relative path' checkbox in the hyperlink dialog. Relative hyperlinks are always relative to the location current TreePad file.
The advantage of relative links over absolute links is that if you keep all your TreePad and other linked files within one large directory (folder), you can move the folder anywhere within your main directory tree and not have to worry about updating all hyperlinks to other files, since their filepath relative to each other remains the same.
For example, FileA's full filepath might be C:\Old\FileA.tpd and FileB's full filepath C:\Old\Sub\FileB.tpd. An absolute link from A to B would show B's location as C:\Old\Sub\FileB.tpd and vice versa for B to A. However, if these links were relative, A "sees" B as located at Sub\FileB.tpd and B "sees" A as located at ..\FileA.tpd. So, if both files were moved from C:\Old to C:\New, the absolute filepaths would have to be edited to change Old to New, but the relative filepaths would not require this.