Restore .Bak file to different Server

When you take a backup all information including the file path is included as part of the backup. As you found out if you just run restore database it will try to restore to the exact same location.

when you include with replace, the backup overwrites the existing .mdf and .ldf files. I normally also have the data and log path directives to specify where to put the files (on my phone will edit to include the exact command).

this is normal behavior since if I am restoring a database on the same server you are most likely recovering from something and would want the db files to be the same.

EDIT: Here is my normal restore command, whether on the same server or different. I like to specify exactly where things are going.

RESTORE DATABASE dbName
   FROM DISK = N'Path\To\Backup.bak'
   WITH MOVE 'dbName_DataFileLogicalName' TO 'Path\To\Data.mdf',
        MOVE 'dbName_LogFileLogicalName' TO 'Path\To\Log.ldf',
       REPLACE,
       STATS = 10

By always specifying the files I am writing to it cuts out some uncertainty and when some one comes and looks it is very clear what is going on.