Ear level is best but plus or minus a few feet usually works out ok. The general recommendation for the center channel is to be within 2-3 feet above or below the main speakers.
In theory, it is better to have the center channel above the screen because we have a harder time localizing sounds that come from above than those that come from below. If you want the center image to seem to come from somewhere around the center of the screen, rather than being able to pinpoint exactly where it comes from, then above is supposed to be better. I've had it both ways and really don't notice too much difference either way.