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Paths
The default path is sounds/ but you can always change it:
this.audio = new SoundOnDemand();
this.audio.path = "assets/sounds/";
Prefered audio format
Prefered audio format is ogg
then mp3
If system doesn't support prefered audio format it will switch to the other one.
You should simply provide both ogg and mp3 version of your sounds.
You can change prefered audio format:
this.audio.preferedAudioFormat = "mp3";
How the paths are resolved
Assuming ogg is format prefered by the browser and path is sounds/:
sound.play("explosion"); /* sounds/explosion.ogg */
sound.play("themes/mainmenu"); /* sounds/themes/mainmenu.ogg */