Designers recommend placing seats back at least twice the width of your screen, but also a few feet away from the back wall, so you can savor your surround sound. If you don't want the rest of the house to shake, invest in heavy carpet and padding to absorb sounds. Don't automatically assume basements are the best place for a home theater (they're prone to flooding). But if the basement is your only option, don't run wires or cables along the floor.
When installing in-wall speakers, use a drywall saw to cut the hole. A utility knife will make the cleanest cuts in drywall, but a utility knife can be difficult to control by a non-expert. Electric rotary saws make cutting drywall physically easy, but they too can be difficult to control. A simple, inexpensive drywall saw (about $10 at your local hardware store) is the best bet for beginners. The speaker's frame will cover up any rough edges.