If the same file with the same ID is found in multiple places then priority is given to valid DXP or DCP files found in:
So if the same file is found in the home directory and the other places, the one in the home directory, if valid, will be the one used. The DTD provides validation for DXP files and a Schema validates DCP files.
Associated XSL files may have an absolute path specified although you can also use a relative path. See examples called Referring to an XSLT filter… in the DXP User Guide and the file element in the DCP Schema Guide. Note that the relBase attribute value of dxp refers to the location of the loaded DXP file or the loaded DCP file.
Note also that, if there are two files with the same ID then one will overwrite the other, even if they have different file names. The ID of a DXP file is the value of the ID attribute of the comparatorPipeline element. The ID of a DCP file is the value of the ID attribute of the documentComparator element. If you lose track of where your files are loaded from then get DeltaXML support and ask about how to use the verboseLoad command on the command line.
For more information about pipelines and the differences between DXP and DCP see here