If a module downloads remote files, where should it put them?

I was wondering if there is some sort of convention for where to place files downloaded to the server by a module? To be more specific, one of the things my module does is download tarballs and extracts them into a directory.

If I had to assume, I'd say the the following:

• The tarballs should get downloaded into the Drupal temp directory.
• The extracted files should be place into a directory called module_name in the Drupal files directory.

$temp_dir = file_directory_temp();
$dest_dir = file_directory_path() . DIRECTORY_SEPARATOR . $module_name;

I think I should do this because for a couple of reasons:

• I can't assume any other directories are writable by Drupal.
• Even though my module does something which many purport as being complicated, I want the default setup to be setup such that most Drupal installations require no, or very little, changes to their directory and file permissions. If a site administrator wants the files to go somewhere else, then I think the best option would be offer a wizard for moving or changing paths. Then, the administrator can be guided on what changes need to made, if any, to the file system.
• I can use Drupals file handling functions. (I could use them anyway, but this way would feel more elegant.)

Is this a correct assumption? Or, is there some different convention I should follow.