Just above your mouth and about a foot away to start. A pop screen would be a good idea. If you can't get one or don't want to spend the money, stretch a stocking across a frame made from a coathanger. That will protect the sound somewhat from popping p's and also protect the mike from spit. It also helps you stay a consistent distance from the mike.

You can get a lot of good advice (and a fair bit of abuse; it's a pretty freewheeling site) at http://homerecording.com/bbs/.

A copy of Home Recording for Musicians for Dummies will be a big help too.