1. Perl will look in the current directory for modules that it hasn't found elsewhere. If you look at the values in @INC, you'll see that '.' is the last element.
2. You can install modules in non-standard locations by using the PREFIX option to Makefile.PL. For example, when installing modules on a machine where I don't have root permissions, I will use a command like:

   perl Makefile.PL PREFIX=~/perl
   [download]

   which puts the modules in ~/perl/lib/site_perl/5.005. Of course, I then have to set PERL5LIB to include this directory.

See perlmodinstall for more details.

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