The files in /etc are system wide files and are loaded first. Files in /home/[username] are personal preference files loaded for each users and are loaded second. If there are conflicts between files in /etc and files in the users home directory, the files in the users home directory override those in /etc.
There are three tools to install packages:
dpkg - the older package installer that is being replaced by...
apt - Advanced Package Tool and
dselect - a menu driven package updating tool.
dpkg is the most primative and doesn't seem to be as robust as apt
apt is the fastest to use. This is how it works: apt-get [action] [package-name]
dselect is the easiest and probably to most robust. It is menu driven so that makes it easier.