i think the better way to describe it is to have it in the root web folder of your domain... so http://example.com/robots.txt
you can also put your sitemap.xml in the root or refer to it with a Sitemap: http://example.com/fldr/smap.xml
line in your robots.txt.
dont forget: you can use Google Webmaster Tools to check to make sure you haven't restricted anything you didnt mean to(you also get to see queries and links woohoo!).
suggestion: id consider using the <META NAME="ROBOTS" CONTENT="INDEX, NOFOLLOW">
if possible because you will still earn linkjuice for links on the page but it wont show up in googles index while a robots.txt directive can leave a plain url with do description in SERPs but will loose all value of links pointed to it because its robots.txted out (its ranking b/c of anchor text so get credit for it)