Localhost isn't a directory, exactly. It's what shows up at your loopback address (127.0.0.1) when you run a webserver on a computer. I think websites usually go in /var/www/ by default though, and then when you put http://localhost or 127.0.0.1 in Firefox it will go to whatever's in /var/www/ Right now, if you go to http://localhost (not file:///localhost), it should show Apache's default start page.
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