Codit and Codit: Local Introduction Video
This is a short screencast showing the basic concept of Codit and Codit: Local and where to place them in a Drupal site.
The basic idea is that Codit: Local is meant to be hacked specifically for one site, so even though it begins as a contrib module, it should be placed as a custom module in a place specific to one site.
To download and install Codit: Local you want something like this (Your destination may vary):
drush dl codit_local --destination='sites/default/modules/custom'
drush en codit_local
-or-
drush dl codit_local --destination='sites/YOURSITE.COM/modules/custom'
drush en codit_local
Codit on the other hand is purely a contrib module that should not be hacked specifically for a site. So it should reside in sites/all/modules/contrib or similar.
drush dl codit --destination='sites/all/modules/contrib'
drush en codit