Chapter 2. Writing a Module, Page 25
In the paragraph that comes before the code on handling submission of the annotation form, it's not said which file in the annotate module folder to put the code in.
The code that follows that paragraph goes in the annotate.module file.
The file that you work on before going into the handling of submission of the annotation form is the annotate.install file. It's not said whether or not this code is supposed to go in the annotate.install file or not.