WOW. SO much chatter about this in 1 day and I missed out.
Some advice about placement. For height, up front the general guideline, as mentioned, it tweeter at ear height during listening. If that is sitting up, then use that, if it is reclined, then use that. Again that is the guideline, but as also already mentioned, experiment a little bit with that guideline. A couple of inches should be easy to mock up before cutting holes. You aren't going to go nuts with putting them drastically out of that "few inches" range.
For speaker placement, you are correct to have your overheads in alignment with your front L and R.
From there things are a bit messy. Where are your seats going to be. For traditional 7.1, I would say pretty much in line with the side left and right surrounds. Looking at your overhead speakers, I would say that you were sitting in front of the big + marked on the page.
The side surrounds should be more in the middle (from front to back) of the overheads. Now I am not saying to slide them closer to the front of the room as your rear surrounds will seem like they are miles behind you.
You want the overheads to create sort of a "box" around you, but you also don't want to give up on good 7.1 base layer audio either.
Look at this actual diagram below from Dolby. The overheads creat a box (I marked it in red) around the seating/listening area, but the side surrounds are in line with the seats themselves (marked in blue).
The next MASSIVE challenge is ceiling height.
7.5 feet is really not good. Dolby says that the minimum is 8 feet for ceilings. I too struggle with 7'10" ceilings and have moved my overhead speakers twice now to make it better.
With overheads, there too are guidelines from Dolby (and DTS for DTS:X material) about how far in front and behind the listening area the speakers should be (using angles, not measurements since each room is different). The problem is that with low ceilings, this artificially puts them too close to the listening area.
So you will need to compensate for this with a bit of math, and then some tweaks. There is an article from a well respected home theater acoustical designer that talks about how to place overhead speakers for multiple seating rows in rooms with less than ideal ceiling heights. You will see that the general idea is to angle the speakers towards the listening area. Aimable tweeters don't compensate enough for this, so I would highly recommend getting on-wall speakers and mounting them to your ceiling at an angle. This is what I did, and I recall someone else here followed my advice on this too and Axiom actually worked with them to create a bracket or something for mounting on the back.
I originally followed this set of diagrams very closely since I have 2 rows of seats. It shows the rear overheads being between the two rows of seats. After initially placing them there, I changes and put them behind my 2nd row (ceiling/room limitation only allowed them to be about 1 foot behind the 2nd row), but this was a great improvement for all seats.
Here is that article.
DOLBY ATMOS: DISPERSION REQUIREMENTS FOR CEILING SPEAKERS I've been investigating Atmos for many years and spend over an hour just talking to the Dolby reps directly while at CEDIA 2014 where they first announce Atmos for the home and I really dove into speaker type, setup, and room needs. In the end it ended up costing me thousands of dollars to implement Atmos in additional speakers, replacing by four quad-pole QS8s with four monopole on-wall M3s for surround duty, plus getting an Anthem MRX-1120 receiver to drive them all (about the only single-box solution at the time, and 3 years later still the current flagship for Anthem with a $3000+ USD price tag). I knew that if I was putting that much money into it, I wanted it to be right, thus the massive research that I did.
Hopefully something here is helpful to you as well.
