A drive letter is used to reference a directory on a remote workstation which contains the Disk Group files. The rest of the configuration is the same as for a local drive.
Distributed Disk Services when run as an application can use mapped drives as long as the user account has mapped the drives using appropriately-formatted paths (e.g. \\ddsserver-workstation\Z$\directory).
A mapped drive cannot be used if Distributed Disk Services is running as a service.
Mapped drives local to users cannot be used as a Distributed Disk Services Disk Group location.