RPM stand for Redhat Package Manager. It's Redhat's default way of installing software.
Quote:
Is an RPM programmed such that the files "know" where to go? Will the RPM create new directories as needed; replace older or conflicting files; put the necessary files in the right directories?
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Yes, to install a package use:
rpm -i
packagename
To upgrade a package use: (also installs the package if it is not previously installed)
rpm -U
packagename
To query if a rpm package is installed use:
rpm -q
packagename
To delete a rpm use: (you first need the full name, use query for this)
rpm -e
packagename
there the options your most likely to use, read the man pages for the others.
Yes it does put the files in the correct directories.