http://bikemagic.com/gear/how-to/mou...pd-cleats.html
Basically line up the ball of the foot with the centreline of the pedal, and adjust the angle so the float (amount your foot can rotate when clipped in) accounts for your natural stance (foot outward, inward, etc.). If your foot is forced inward on the bike but you tend to be naturally outward, you will have knee problems and its pretty painful (been there).
edit: Same position for MTB/Road.