In order to set Tomcat up to properly deploy GeoServer you need to make a few modifications if you're running it in Eclipse.
In the Overview page of Tomcat server set the Server Locations to 'Use Tomcat installation'.
Next, extract the geoserver.war file to /tomcat/webapps/geoserver and configure the Tomcat server.xml with the following statement.
<Host appBase="webapps" autoDeploy="true" name="localhost"
unpackWARs="true">
<Valve className="org.apache.catalina.valves.AccessLogValve"
directory="logs" pattern="%h %l %u %t "%r" %s %b" prefix="localhost_access_log."
resolveHosts="false" suffix=".txt" />
<Context docBase="E:\tomcat\webapps\manager" path="/manager"
privileged="true">
</Context>
<Context docBase="E:\tomcat\webapps\geoserver" path="/geoserver">
</Context>
</Host>
Finally, edit Tomcat start up arguments and add "-XX:MaxPermSize=128m" to the VM arguments.