Octopress themes are stored in the the root folder of your project in a folder called .themes. If you installed one of the custom themes for Octopress [link], the .themes folder is where the instructions tell you to clone the theme git repository.
Themes can also be installed by passing a parameter to the rake install command. the default theme being “classic”.
Using the .theme folder for your themes helps ensure that your customisations do not get over-written by Octopress updates .