Paths are the locations for executables which can be accessed from any location.
# echo $PATH
# PATH=$PATH:/dir/dir1
I downloaded UNace (an .ace acrhive extractor) I copied the unace folder to /usr/bin/ I added a path: # PATH=$PATH:/usr/bin/unace
To edit a path for a user open $HOME/.bash_profile or to edit for all users edit /etc/profile In either file you will see: PATH=$PATH:$HOME/bin, just add paths to that, separate paths by a :
PATH:$PATH:$HOME/bin:/usr/bin/unace