Where is the "sites/all" folder for an ubuntu linux installation?
It's referring to the "sites/all" folder in your website's root folder. 

The location of your site's files will have been set by your web server software (probably Apache, in this case).

Have a look here:  /var/www/

and see if there are any directories in there that look like "httpdocs" or anything with your site's name in it or anything.