My first steps with jms multisite.

I have a main website from which I want to use my user registration and virtuemart shop.
Under this I want to add a subsite for a specific event, reusing most of the components of my main site.

I restored my live website on my localhost for testing purposes.
in the localhost environment I installed the multisites component on the master website.
Then I created a subsite in the 'manage subsites', but the root folder points to original live website.

Where can I change this so it points to my localhost?

If you are using VirtueMart, this is a parameter that you probably setup in the "VirtueMart" configuration.
See the "Secure URL" parameter in the "VirtueMart" configuration.

If the VirtueMart back-end redirect you on the live site, try edit the VirtueMart.cfg.php file that contain the configuration.

Also verify that you don't have a "live_url" parameter in the "Global Configuration".
This parameter is used to redirect the website to this URL.
THis is a old Joomla 1.0 parameter that should no more used but still used by old extensions.