I'll try to take one or two links out (or as many as possible when having it on the large cog back).
This picture a Part Tool article about chain length. It shows a good derailleur position when the largest front and rear cogs are selected:
"Adequate chain length seen above in largest sprockets front and back. Note the chain bends at both pulleys."
http://www.parktool.com/repair/readhowto.asp?id=26
The largest cogs + 2 links is also a common method:
http://bicycletutor.com/calculate-chain-length/
You can take a look at the installation instruction of your derailleur. All the ones I have seen specify the recommended chain length.
Kam