Okay, so on the linux file system, "/" tells you it's the very top of the file structure, so everything starts with that.

If you open the Terminal program on the N900 and type:
pwd
(this stands for "present working directory")
it'll report to you where you are at at that time. The default start location is called you "home directory" and will show as:
/home/user

The area that shows in the N900's graphical file manager as "N900" will show in the terminal as:
/home/user/MyDocs

In your home directory, there are several directories that contains settings and preferences for all of your applications. These directories have a "." in front of their name that usually makes then invisible, but you can still "cd" to them. So if you type:
cd /home/user/.picodrive
this would put you in the directory that contains your preferences and settings for the picodrive application.

In this directory, you can type:
mkdir bios
and that makes a new directory call bios. You now would have:
/home/user/.picodrive/bios

If you have (somehow) obtained SegaCD bios files from the magical google, and placed them on your N900 in the "N900" area of the phone, you would type this:
mv /home/user/MyDocs/*.bin /home/user/.picodrive/bios
(it'll yell some warning at you about preserving permissions, you can ignore that)
You now have the bios files in the right place to play SegaCD game .iso or .bin images.

If your magically obtained SegaCD bios files were dragged on to your N900's Memory card, then instead you would type:
mv /media/mmc1/*.bin /home/user/.picodrive/bios

Any questions?