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The answer to this question appears to depend upon which RPM-based distribution of Linux you are using. RPM looks for packages wherever you tell it to look at the time you use the rpm command. Many distributions such as Mandriva (the one which I use) have a "wrapper" script (in Mandriva's case 'urpmi') which simplifies the use of RPM, or a GUI tool for point and click mouse operation of RPM. In such cases there will be a tool for configuring package sources/locations (usually found in the configuration menu of your desktop's menu system or in your distro's configuration tool) or a config file which can be edited with your favorite text editor (usually found in /etc/ somewhere). In the case of using rpm all by itself from the shell (command prompt), you'd normally just type 'rpm -ihv <path to rpm file>' or 'rpm -Uhv <path to rpm file>' or 'rpm -<your options> <path to rpm file>'. Details on the options available can be found on most Linux distributions by typing 'man rpm' at the shell. http://www.rpm.org/ is the official website of RPM and might have some information as well.

It really rather sounds as if your best bet would be to either locate your distribution's standard GUI package manager, or find one you like and install it and use it instead. I personally prefer one called SmartPM (Smart Package Manager - which has been written about here http://www.linux.com/articles/55574 on linux.com), as it has a nice GUI, commandline support, a package management shell, and support for packages other than RPM, such as DEB (in case you like it enough to want to use it on NON-RPM based distros such as Debian Linux or Ubuntu Linux), but if your distribution provides a tool of it's own, it is usually best to use that, as it will be custom tailored to work best with your distribution of Linux. Usually once such a tool is configured properly, it's dead-simple to install new software from that point forward, as you'll just use that tool to search for and install any new software you might happen to want. Hopefully I've given enough information to set you on the right path to locate what you need. Again, I apologise for not being able to be more specific, but without more detail as to what distro you are using, what package you are trying to install, etc, etc, I really can't give much more than general explanation. With any luck, what I've said here will be enough to help you and anyone else with any similar question get started in the right direction.

For further learning, you can try searching google (or your favorite search engine) for 'linux rpm package management howto' or you can search the howtos http://www.linux.com/base/ldp/howto/HOWTO-INDEX/index.htmlt here on linux.com for useful information. There are also a wide variety of good books about Linux which can usually be found quite cheaply at amazon.com or similar places. You will find that as you learn more about Linux you will realize that it's really not nearly as complicated as it first appears, and in many ways is actually simpler to use than many other operating systems (contrary to what some folks would have you believe). Don't be afraid to try different tools, different desktops, and read different sources of information until you find the combination that works for you.

As this is my first post here, I sincerely hope that my rambling has been helpful to you, or if not, then to some other person with similar issues. :)