Best location to keep the javascript files in drupal 7
If it's a theme, and if you are defining scripts in .info file, keep the .js files in scripts folder of your theme folder (e.g sites/all/themes/mytheme/scripts). You don not have to define the whole path. Just enter the relative path to the .info file (scripts/myscript.js) and it will get included in the entire site. 

if you are using drupal_add_js, in a custom module, the common practice is to keep the file in module's folder. Set it as drupal_get_path. 

Although it's not recommended, if you are hardcoding the script in html.tpl.php or page.tpl.php folder, I'd place the js file in theme folder and use a drupal_get_path to get the actual path.