That's all in the title...to be valid and to be read by launchers (like Unity dashboard) a .desktop file must be in /usr/share/applications or in /usr/local/share/applications but a foundamental rule of the Showdown contest says that every thing must be installed in opt/. So where do I install it for my Showdown app?
The requirement that application has to install in /opt has few exceptions. And as it's because of ARB submissions guidelines, you can check this page for more details.
According to it, one of exceptions to the /opt rule is the .desktop file. So you can go ahead and install it to /usr/share/applications, as long as you add a "extras-" prefix to it's name.