Default Location for Applications?

Can someone tell me where the Applications folder is supposed to go in OS X Tiger? Is it just supposed to be in the top directory (Macintosh HD)?
While I was working in an FTP application, I tried to drag and drop something to my desktop and it took my WHOLE application folder to my desktop! Not even sure how that's possible.
Thanks

As ibod says, "Correct", though some applications can be located in your personal directory/folder. If you share a computer and don't want others to have access to an app. that would be the place to put it. Some application, though, insist upon being in the top level applications directory and having all their other components in special places, or they can't seem to find them or get access to them.

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