The ITU standard configuration has all five speakers equidistant from the listener and all in the same horizontal plane.
Obviously, not all rooms allow this, so you have to look at the room and decide on the best compromise. If the surrounds are very close to the listener, and/or in a traffic area, then you can place them up to about 7 feet up if you need to. This not only gets them out of the way, but it also gets them further from the listening position.
Ideally all speakers should be in the same plane, at ear level. This doesn't change in a 7.1 speaker set-up. Surround content that's intended to come from your sides or behind you should indeed appear to come from those directions, not from somewhere above or below the listening plane.
However, there are problems with placing surround speaker at ear level. In a home theatre environment where people may be sitting on either side of you or even behind you, their heads could block the path between you and the speaker. Raising the speakers a couple of feet above the listening plane can help make sure that everyone is in line-of-sight of all the surround speakers.
Personal taste can also play a role in how high you place your surround speakers. I know a couple of people who find surround speakers placed at ear height to sound somewhat distracting because it pulls their attention away from the front soundstage. A little height makes the sound slightly less direct and a bit more ambient.
Try different heights for your surrounds and decide which height sounds best to you before committing to a location. You can temporarily place speakers on cinderblocks, boxes, step-ladders, etc., until you find the right height that sounds best to you.
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