@retroguy23 mediamogui is correct but I honestly do not keep my images and gamelist there. I keep them in the /home/(user)/roms/(system) folder. Ex. home/pi/RetroPie/roms/megadrive/images/ (Just easier for me I guess :P I have done a LOT of hand editing on my lists)
Emulationstation is programed to look there in the default then there in the rom folder if one is not found in the default folder.
Just easier and faster to get to my roms on my pi (or other linux system)
so your gamelist.xml is in the rom folder. For example my megadrive list is in the megadrive/roms folder (one game list per folder). That is:
my megadrive gamelist is located in /home/pi/RetroPie/roms/megadrive/gamelist.xml
The start of my game list looks like this:
...
<game>
<path>./Sonic the Hedgehog (USA, Europe).smd</path>
<name>Sonic The Hedgehog <-(this can be anything you want)</name>
<desc>Sonic the Hedgehog is the first of many games...</desc>
<image>./images/Sonic the Hedgehog (USA, Europe)-image.jpg</image>
<video>./images/Sonic the Hedgehog (USA, Europe)-video.mp4</video>
see the image and video tags? the ./images tells emulationstation to look in the "parent" folder. (this folder is the parent folder because you already told ES to look for the rom in that folder with the <path> tag) In this case it means the rom folder of the game you are showing on screen from the list ..but now look in a sub directory called "images"
I can load ALL my arcade roms from the arcade folder. Any version of MAME, Daphne, or Final Burn Neo are all mixed in the arcade folder. So I have one arcade folder and the rest are consoles.
(But this is what works for me set it up the way it works for you!)