Does javascript have to be in the head tags?

JavaScript is executed wherever it is found in the document. If you place inline JavaScript in the body, it will be executed when the browser comes to it. If you're using $(document).ready(...) to execute things, then the positioning shouldn't matter. Otherwise, you may find corner cases where it matters. In general, it does not matter. Scripts end up in the head tag mostly out of tradition.

No, it can be anywhere. In fact, it’s sometimes a good idea to put it at the bottom of the document. For an explanation why, see http://developer.yahoo.com/performance/rules.html#js_bottom.