Program binaries will install to places like /usr/bin.
However, the frugal install of damn small linux is really not meant to be used this way; the frugal install is typically used as a backup or minimal operating system, and at best you would add applications using the extensions system
, downloading them to hda3.
If you actually want to have a more featured install and use apt-get, you should chose the normal install
; this will mean that everything (except the swap) can be in the same large partition.
You are no doubt aware that DSL is aimed at being very minimal. You could also look at DSL-N
from the same site (which uses a kernel from the current 2.6 series), or even at a Debian install, unless you are really short on memory or permanent drive space.