If I'm not mistaken, the server designated as the quarantine server makes this "decision". With my memory fading I think you can configure the location via the Symantec System Console.
Typically by default it will put them on the local install directory of the NAV CE program under a subfolder I believe (Quarantine). The configuration for where the files are stored is usually determined by how you initially setup your environment.
For example, standalone PC's may have been configured via a cd installation and configured to store to the local hard drive or to the central quarantine server (often this is the same as your system console). If you have a central quarantine server then you would change the configuration from there (the MMC - Quarantine Server option).
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