Where are directories

When coding a views/.rhtml file, where do the various directories fall
in relation to my app. For example, if I have a file in public/images of
"image1.jpg", I need to code a "<img src=......>" for it (I think, I
won't be shocked if someone says "in rails we do it this way). *IF* I'm
coding the <img> tag, where is the file ... what directory path do I put
in so I can find image1.jpg?

I would just do...

<%= image_tag "image1.jpg" %>

which will result in html similar to:

<img src="/images/image1.jpg">

Which will look in RAILS_ROOT/public/images/image1.jpg for that file.