This is a silly question but how does Panels know where to insert the panels I just made? I didn't type a single line of PHP and yet there it is! It's like magic (woooh...)! On a side note, can I define where it gets placed through PHP? Thanks.
Panels places the panel into the 'content' region of the selected page.
If you want to place it somewhere else on the page, try using mini-panels to create a block and place it that way. No need to write custom PHP code for that.