Although video steals the show in a home theater, poor speaker placement will turn a great theater into a muffled mess. In addition to purchasing quality matches speakers placement is extremely important. This image from shows proper setup for both 5.1 and 7.1 systems. Always make sure your front speakers are at EAR height and not at couch height, you want to sound to go to your ears right? Also try to place you center speaker as close to ear height as possible, usually this means above or below your TV.
In addition to speaker placement subwoofer placement is important. As subwoofers are omnidirectional they are more forgiving, however better placement will always lead to better sound. For best results follow these steps from audioholics.com
Subwoofer Placement Procedure
Connect the “Sub Out” of your Receiver / Preamp processor using an RCA cable into a Y-cable into the “L” and “R” inputs of your subwoofer. Note: Unless otherwise stated by the manufacturer, be sure to utilize both inputs of the sub as many subs sum the “L” + “R” inputs to yield a 6 dB gain from the input voltage of the processor. Place the Subwoofer in the most common location of your listening area. (Usually your couch, chair, or bean bag). Play a bass heavy CD or other format (not 8 track!) that you are familiar with and turn the volume up so that the sub is really working. Note: The reason why you should crawl is that standing will put you about 5 feet off axis (depending on how tall you are) with the sub and thus will change the characteristics of the sound enough to potentially cause you to place the sub in a non optimal position.
Now get on your hands and knees and pay homage to the subwoofer (just kidding). Seriously, for the next part of this set-up, prepare to do some crawling (this is the part that could get you committed, but its all worth it!)
Crawl around the listening room and listen for when the sub seems to sound the best. (IE. Listen for depth, loudness, tightness and definition) If possible, place the sub as close to this position as you can. This will ensure you have chosen the best location in the room. Now get off your knees and calibrate your system.
A youtube video on speaker placement