using rpm

[Ian Dixon <zippller optonline net>]

I'm having some issues understanding just how to install a package using
RPM. I've been through man rpm, but that doesn't answer my question here
which is; 
1. Do I download the package to my home directory and then install it
from there, or do I have to download it to a particular directory? If a
particular directory, which one?
2. Once I have downloaded the package what is the form of the command,
is it as shown below?

 rpm -i foobar-1.0-1.i386.rpm

Thanks again for any help,

Ian