The one that matters is the one in your skin folder. However, the other issue to be aware of is this file is cached by the browser and even refreshing the page won't refresh it, you have to clear your browser cache before you will see the new one. In FF its Tools > Clear Private Data...

You can uncheck everything but cache as cache is the only thing that needs to be cleared. In IE its delete temporary internet files.

Some times it won't clear the files for the current site you are visiting so it may be best to close all tabs but one, go to a different site like google then clear the cache then revisit your site.

Hope it helps,

Joe