If you have the space, which it sounds like you do, go 7.1. Especially with the new bluray technology out, why would you want 5.1 in this day and age especially in that deep room.
The "rear surrounds" go behind you, the "side surrounds" go to the side. You want them spaced out with lots of seperation to get the best experience, not all crammed close to each other. Also, you want them to be at least 2-3ft above your ears or higher works, for best results, mine are about 7ft off the floor.
Here is a drawing from Dolby on 7.1 layout, in a larger room, the speakers would be more spaced out.
http://axiomaudio.com/home_theater_layout.html
